Revenue, gross fiscal deficits widen in April-September FY12

NEW DELHI: Revenue deficit and gross fiscal deficit of the government in April-September this fiscal were higher than that in the same period last fiscal mainly due to large refunds under direct taxes.

"Revenue deficit and gross fiscal deficit during the first half of FY-12, at 72.2 per cent and 68 per cent of Budget Estimates, were higher than those during the corresponding period of the previous fiscal year mainly reflecting the impact of large refunds under direct taxes this year and higher telecom receipts in the previous year," the Finance Ministry said in its quarterly report on Public Debt Management.

The revenue deficit, or the mismatch in the expected revenue and expenditure, had stood at 27.1 per cent of the Budget Estimate during the first half of 2010-11.

The fiscal deficit, or the difference between total revenue and total expenditure of the government, during the same period of last fiscal was 34.9 per cent.

The Union Budget 2011-12 projected the fiscal deficit for 2011-12 at Rs 4,12,817 crore or 4.6 per cent of GDP. The fiscal deficit during 2010-11 stood at 4.7 per cent.

On the other hand, the revenue deficit for the current fiscal was projected at Rs 3,07,270 crore.

"The fiscal outcome during the first of half of FY-12 (April-September) indicates that all the key deficit indicators as percentage of Budget Estimates for 2011-12 were substantially higher than their levels during the same period of the previous year because of lower revenue collections both from tax and non-tax sources," the document said.

Gross tax collections during the period were reported at 39.6 per cent of Budget Estimates. These were 43.4 per cent lower than that recorded in the year ago period.

In the direct taxes, corporation tax collections showed a moderate growth of 3.4 per cent due to large refunds while personal income tax increased by 17.3 per cent against budgeted growth rates of 21.5 per cent and 16.2 per cent, respectively, for FY-12.

Among the major indirect taxes, collections from customs duty and service tax showed growth rates of 22.5 per cent and 37.5 per cent, respectively, during April-September 2011 as against budgeted growth rates of 15.1 per cent and 18.2 per cent.

However, collection from excise duties grew at a moderate growth of 13.9 per cent against budgeted growth of 19.2 per cent for FY-12.

Non-tax revenue at 40.5 per cent of Budget Estimates was lower than previous year. It was mainly due to absence of any major events like the sale of telecom spectrum in the last fiscal.

But there was some containment in the expenditure side. Total expenditure stood at 47.6 per cent of Budget Estimates during April-September of this year. The same was recorded at 48.5 per cent of the estimates in the corresponding period of previous year.