Fiscal deficit at $65.7 billon for Apr-Nov: Govt

The fiscal deficit of India for the period between April to November stood at Rs 3.06 trillion ($65.7 billion), or 76.4 percent of the full-year target, the government said in a statement on Thursday. The tax receipts stood at Rs 2.33 trillion and a total expenditure stood at Rs 6.22 trillion for the first eight months of the financial year 2009/10.

In July, the government had forecasted fiscal deficit of Rs 4 trillion, or 6.8 percent of gross domestic product (GDP), for 2009/10.

The finance minister Pranab Mukherjee earlier this month had said that the fiscal deficit would not cross the target of 6.8 per cent of the gross domestic product (GDP). With the prevailing trends in the receipts and expenditure, along with better than expected economy performance in the second quarter of the current fiscal, it is expected that the fiscal deficit will remain with the estimate of 6.8 per cent.

However, the direct tax collections by the government increased by a marginal 3.7% to Rs 1.83 lakh in the first 8 months of this fiscal. Further, in the personal income tax segment, the government collected Rs 70,262 crore, up 4.53% while in November, the tax collections were nearly similar to last year as the mop-up was Rs 10,375 crore.

Moreover, the corporate tax collections declined by about 30% to Rs 3,214 crore against Rs 4,561 crore last fiscal while in the April-November period, the collections by way of the Security Transaction Tax stood at Rs 4,349 crore, up 4.44%.

The Finance Minister, Mr. Pranab Mukherjee, yesterday stated that the Indian economy cannot sustain a high fiscal deficit for very long and it is, however, still too early to pull out of the fiscal stimulus.

“We shall have to strike a balance between the requirement of the economy and also the capacity of the economy to bear this level of fiscal deficit and borrowing,” the Finance Minister said on the sidelines of a Corporation Bank event.

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