India’s Fiscal Deficit eased to 5.7 in the Fiscal Year 2011-12

According to the figures released by Controller General of Accounts (CGA) on 31 May 2012, India’s fiscal deficit eased to 5.7 per cent of GDP, lower than 5.9 per cent projected in the revised estimates in the Budget.

Fiscal deficit, the difference between the government's total receipts and expenditure, capped at 5.09 trillion rupees in 2011-12. While the tax revenue receipts curbed to 6.31 trillion rupees against the projected figure of 6.42 trillion rupees, government’s expenditure both non-plan expenditure and plan expenditure also went down at 8.84 trillion rupees and 4.13 trillion rupees respectively. The revenue deficit was at 4.3% of GDP.

The government is working hard to curtail the broadening fiscal deficit and aiming to bring it down to 5.1 per cent in the fiscal year 2012-13. In order to meet its fiscal deficit target the finance ministry is eyeing to cut the subsidy bill to below 2 per cent of GDP in the fiscal year 2012-13and 1.75 per cent in the subsequent years. The slowing economy is making it difficult for the government to achieve its fiscal deficit target.

The gross domestic product (GDP) data released by the Central Statistical Organisation (CSO), had capped the GDP growth rate rate of India in 2011-12 at 6.5 per cent, as against the earlier estimate of 6.9 per cent.