India's fiscal deficit breached the full-year estimate at the end of December 2014. However, Coal India's stake sale will bring in ₹22,500 crore, helping the government get closer to achieving its stated goal of meeting the fiscal deficit target.
In December end, the fiscal deficit touched ₹5.32 lakh crore, at 100.2% of the budgeted estimate for the full fiscal year, according to data released by the Controller General of Accounts on Friday. In December 2013, the fiscal deficit stood at 95.2%, forcing the then UPA government to cut spending to try and limit the deficit to 4.6% of the GDP.
The Narendra Modi-led NDA government had reiterated its stand on limiting the current year's fiscal deficit to the budgeted 4.1% of the GDP. The Centre has also tightened planned spending, even as it continues to increase the pace of disinvestment in state-owned entities, to meet the shortfall in revenue, the cause behind the fiscal deficit spiking.
Net tax revenue stands at 55.8% of budgeted estimates, as of December 2014, compared to a year-ago revenue of 58.6%. The reduced inflow has limited discretionary spending.
As of December 2014, plan expenditure touched 61.3% of budget estimates. With limitations on the amount that can be spent over the last fiscal quarter, there is likely to be substantial savings on this front, reported The Economic Times.
The mobile spectrum auction is also expected to turn in the necessary funds for the government to be able to reach the estimated 4.1% fiscal deficit.