In a big sign of disappointment to Indian government,
India’s fiscal deficit widened to 82.6% to cross Rs. 4.38 lakh crore
during April-September this fiscal as against Rs.5.31 trillion Budget
Estimates for 2014-15. In the corresponding year-ago period, fiscal
deficit was 76% of the budget estimate.
During the
first half of current fiscal, total expenditure increased to Rs 8.62
lakh crore or 48% of the budget estimates (BE), while, revenue receipts
lagged 35% to Rs 4.17 lakh crore, mainly due to slowing tax
collections. Of the total expenditure, plan spending was at over Rs.
2.46 lakh crore. Under non-plan head, it was Rs.6.15 lakh crore. Net tax
receipts in the first six months of current fiscal stood at Rs. 3.23
lakh crore, or 33.1% of BE. Weak manufacturing activity has led to a
contraction in excise duty collections and corporate tax collections
also remained below expectation due to the poor corporate profits. The
fiscal deficit was recorded at around Rs 5.08 lakh crore or 4.5% of GDP
in FY14 as against 4.9 % in FY13.
With an aim to
trim the fiscal deficit to 4.1% of gross domestic product (GDP) in FY15,
the government has recently issued new austerity measures including 10%
cut in non-Plan expenditure and ban on creation of new posts. The
government also decided to barred senior officials from first-class air
travel, foreign jaunts, holding meetings in five-star hotels and
purchase of new cars. On positive side, the government will have to
provide lower fuel subsidy due to the deregulation of diesel and
declining crude oil prices in the international market. Further,
government also has a cushion of lower spending on food subsidy because
the food security law is not likely to be rolled out by many states this
year. The government has already set aside Rs 1.15 lakh crore for food
subsidy this year. 
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