Fiscal deficit expected to exceed budget estimate despite higher tax collection

Mumbai: Despite heavy tax collection, the country's fiscal deficit at the end of the current financial year has increased to 6 percent from the budget estimate, according to a rating agency report. While presenting the budget for the current financial year, the fiscal deficit was expected to be 5.90 percent.

The report of the agency claims that the deficit will increase as a result of high expenditure on employment guarantee scheme and some subsidies including food.

This expenditure is expected to increase to Rs 57360 crore against the budget provision of Rs 44000 crore under subsidy for nutrient based fertilizers. The amount provided in the budget has been exhausted by the end of October itself.

Apart from this, against the provision of Rs 60,000 crore under MNREGA scheme for employment, Rs 79,770 crore has been spent under this scheme so far. The government is expecting an increase of 17.20 percent to Rs 24.50 lakh crore, which was estimated to increase by 11.70 percent to Rs 23.30 lakh crore.

Revenue through disinvestment is seen to be lower than the budget estimate, but the disinvestment shortfall is likely to be compensated if the revenue through taxes is higher than expected. Against the target of Rs 51,000 crore, the government has been able to raise only Rs 8,000 crore through disinvestment till October in the current financial year.