India’s fiscal deficit for the April-September 2011 quarter stood at Rs.2.92 lakh crore, higher by 120% from Rs.1.33 lakh crore year on year. Revenue deficit for the quarter came in at Rs.2.33 lakh crore as against Rs.74000 crore a year ago.

More importantly, India’s fiscal deficit has already reached 71% of FY12 estimated figures, in the first half of 2011-12 (April to September), on the back of tepid infrastructure output growth, fiscal slippages and unsustainable subsidy bills.

fiscal_deficit

Long back, Finance Minsiter Pranab Mukherjee had estimated the budget deficit at 4.6% of GDP for FY12. Moreover, this time around government is still way off its disinvestment target of Rs.40,000 crore for the 2011-12. The exchequer has so far capitalized only on 3% of the target by divesting stake in PFC.

To add to the woes, the Union Government has also shown its intent to borrow additional Rs.53,000 crore during the second half of the fiscal year, in order to bridge revenue shortfall in fiscal deficit. Further, economists have voiced apprehensions that the FM would miss the FY12 by 0.5%, if growth and revenue collection remains tepid for this fiscal year’s October-December period.

[Image Source]

(Visited 364 time, 1 visit today)

2 Responses to India’s Q2 Fiscal Deficit doubles at Rs.2.92 lakh crore

  1. Whats going to happen :
    1) Fiscal deficit is growing.
    2) Trade deficit widens (Oil consumption going up, production stagnates. Gas consuption grows and production decrease, coal, Iron ore consuption increase, production decrease, exports not growing as planned)
    3) International bodies like S&P, and oterhs down grade India.
    4) Down grade will make loans expensive for India.
    5) GDP slows down, forign capital flows out, making markets to come down.
    6) India makes many more concessions to attract forign capital in controvertial fields like FDI in retail etc.
    7) Finally we become like Americans. Pennyless but boasting of success.
    All the while when other nations are silently progressing forward like Thailand, Vietnam, Argentina and many others.

  2. There are so much talk and stress on fiscal management. I do accept that fiscal deficit is problem for any country but it is not always for economies as they help to increase economic activities in system.

Leave a reply