Fiscal deficit down at 4.89% on higher revenues

Helped by higher revenue mop up, fiscal deficit for 2012-13 worked out to be at 4.89 per cent of gross domestic product, down from revised estimate of 5.2 per cent, sources said.

"Due to good revenue receipt and higher non tax revenue collection, fiscal deficit has come to 4.89 per cent against revised estimate of 5.2 per cent," finance ministry sources said.

The government had budgeted revenue realisation for 2012-13 fiscal at Rs 10.38 lakh crore (Rs 10.38 trillion).

According to sources while there was some slippage on the direct tax front, the indirect tax mop up has exceeded the revised estimates.

The revised estimates was to collect over Rs 5.65 lakh crore (Rs 5.65 trillion) from direct taxes and Rs 4.69 lakh crore (Rs 4.69 trillion) from indirect taxes.

Total expenditure was pegged at Rs 14.30 lakh crore (Rs 14.3 trillion).

Commenting on the development, Deputy Chairman of Planning Commission

Montek Singh Ahluwalia said investors would be reassured about India's commitment to contain fiscal deficit.

"And I think there were lot of concerns not only among investors but financial analysts say 2-3 months (ago).

"Their concern was they felt we wouldn't be able to stick to the fiscal deficit target.

"I think they should be pretty reassured now that we can stick to the fiscal deficit target", he said.

Finance Minister P Chidambaram had last month said revenue growth is ‘commendable’ in the ‘difficult year’ of 2012-13 when the economic growth has come down to 5 per cent.

Committed to fiscal prudence, the government in the Budget had proposed to lower fiscal deficit to 4.8 per cent of GDP in 2013-14 and reduce it gradually to 3 per cent by 2016-17.

The Finance Minister had also exuded confidence that the revenue target for 2013-14 financial year would be achieved as the GDP growth is likely to be over 6 per cent.

The government estimates GDP growth in the current fiscal to improve to 6.1-6.7 per cent.