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Issue Date: August 04, 2014 Can India manage to achieve its ambitious fiscal deficit target? Impact  Indians are conservative when it comes to spending as they are taught to save money conventionally. But at national level, India finds it difficult to manage its income and expenditure. The Indian Government often struggles to keep its expenses under check. Growth in the income of the Government is limited and there are many claims on the revenue as the Government has to achieve a number of socio-economic objectives. The shortfall in the revenue of the Government over its expenditure is called fiscal deficit. At present it is mounting. At 2.98 lakh crore, the fiscal deficit has touched 56.1% of its full year target for 2014-15 in the first quarter itself. The outgoing Finance Minister Mr P. Chidambaram had used accounting tactics to contain fiscal deficit number for the fiscal year 2013-14. Oil subsidies nearly worth Rs 35,000 crore were deferred and passed on to the next Government. Moreover, in the interim budget this February, he also proposed to lower the fiscal deficit to 4.1% in the financial year 2014-15. When BJP led NDA took over from UPA II, it was believed that, the new Finance Minister, Mr. Arun Jaitley may revise the fiscal deficit target upwards.  Actual figures are for the April-June quarter of 2014-15 Receipts include tax receipts, non-tax revenues and non-debt capital receipts Expenditure include plan and non-plan expenditures (Source: Business Standard; PersonalFN Research) As depicted in the graph, actual expenditure has exceeded the actual receipts by around Rs 2.98 lakh crore, which comes to be around 56.1% of the full year target. During the last financial year while the UPA Government was in power, the fiscal deficit had come in at 48.4% of budget estimates during the first quarter of 2013-14. This suggests the fiscal position has become even more difficult now than what it was last financial year. Having said this, it is noteworthy that, the non-plan expenditure has gone down in the April-June quarter of 2014-15, while the plan expenditure has gone up; which suggest that we could expect some turnaround in languishing economic growth rate. Moreover, we need to see how revenue streams along with the expenditures flow in the ensuing quarters of the fiscal year. Generally, it is in second-half of a respective fiscal year that revenues tend to flow from avenues such as disinvestments, tax collections and dividends; which aid in bridging the fiscal deficit gap.
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