The Hindu Business Line : Fiscal deficit shoots up on lower tax collections

DECLINE in net tax collections to the tune of Rs 5,034 crore, combined with a runaway expansion in non-Plan spending, has pushed up the Centre's fiscal deficit significantly during the current fiscal.

According to official data, net tax collections during April-May 2003 stood at only Rs 4,835 crore, as against Rs 9,869 crore during the open two months of the previous fiscal. The massive decline has been largely due to large-scale refunds on taxes, following the Finance Ministry's move to clear these in the early part of the fiscal. Ministry officials expect collections to improve in the coming months.

The non-tax revenues have, however, been higher (Rs 2,601 crore versus Rs 1,943 crore), translating into total net revenue receipts of Rs 7,436 crore during April-May 2003 against Rs 11,812 crore for April-May 2002. Non-debt capital receipts have also been higher (Rs 4,100 crore versus Rs 3,774 crore), taking total receipts to Rs 11,536 crore (Rs 15,586 crore).

But on the other hand, the Centre's non-plan expenditure has shot up from Rs 34,253 crore to Rs 37,042 crore, notwithstanding a decline in its interest payments from Rs 15,936 crore to Rs 14,198 crore — a clear outcome of falling interest rates. While the fiscal deficit has gone up from Rs 29,983 crore during April-May 2002 to Rs 34,141 crore during April-May 2003, the revenue deficit and primary deficit (revenue deficit net of interest) have increased from Rs 27,119 crore to Rs 32,330 crore and from Rs 14,047 crore to Rs 19,943 crore.

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