Fiscal deficit crossed 60 per cent of budgetary targets during the first five months of the current fiscal, which Finance Minister P Chidambaram attributed to higher devolution to states and exuded confidence of keeping the deficits within the targetted range.
Fiscal deficit touched Rs 90,678 crore (Rs 906.78 billion) during April-August, 2006, which accounted for 60.98 per cent of the budgetary target of Rs 1,48,686 crore (Rs 1,486.86 billion) for the whole year, he said in Delhi on Friday.
Revenue deficit stood at Rs 79,348 crore (Rs 793.48 billion), which was 93.71 per cent of the target of Rs 84,727 crore (Rs 847.27 billion) for entire 2006-07, he said.
"There are some concerns about the fiscal deficit figures and revenue deficit figures. I am confident, given the buoyancy in tax revenue, targets for fiscal deficit and revenue deficit will be met for the current fiscal," Chidambaram said.
However, the rate of growth of fiscal deficit slowed down a bit in August since it had already crossed 58 per cent till July.
Chidambaram said devolution to states in the first four months has been higher than last year. Precisely, states share of taxes, non-plan grants, plan grants were approximately Rs 11,737 crore (Rs 117.37 billion) more this year than last year.
States share in taxes alone was Rs 5,266 crore (Rs 52.66 billion) higher than last year, Chidambaram said.
"Many of these (devolution) seem to be front loaded and devolution (already) taken place in the first part of the year will get adjusted in the last part of the year," he said.
However, he added that fiscal situation required to be watched carefully.
"We have to try to contain expenditure within the budgeted level, and for the same, every ministry/department is requested to make expenditure within the budgeted figure," the finance minister said.
He said there would be some unexpected expenditure but it will be met through savings as long as it is within limits. Hoping that other ministries and departments would
cooperate with the finance ministry to keep the expenditure within limits, Chidambaram said fiscal deficit would be contained at 3.8 per cent of GDP and revenue deficit at 2.1 per cent of GDP during the current fiscal, as estimated in the Budget.
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