Data released by the Controller General of Accounts on 31 January 2012 showed that the deficit situation in December 2011 was the highest since December 2008 when it stood at 163.8% of the fullyear target due to the fiscal stimulus provided by the government to boost the economy.
The deficit between April and December 2011 at Rs 3.81 lakh crore reached 92.3% of the 2011-12 estimate. It stood at 44.9% of the 2010-11 target in the corresponding period of the previous fiscal year.
Sluggish tax revenues, rising spending commitments and subsidies negetively impacted the government’s fiscal situation. Volatile market conditions spoiled hopes of raising Rs 40000 crore from stake sales in state-run companies.
The government managed to raise Rs 1145 crore from the stake sale in Power Finance Corporation so far.
Net tax revenues up to December 2011 stood at 63.3% of the 2011-12 target, compared to 73.2% in December 2010. The drop indicated sluggishness in tax revenues due to the economic slowdown.
According to finance ministry officials and economists fiscal deficit is expected to be around 5.2% to 5.8% of GDP in 2012.
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