Fiscal deficit projected at 6.8% of GDP

The Finance Minister Pranab Mukherjee has said that the fiscal deficit as a percentage of GDP is projected at 6.8% as compared to 2.5% of the Budget Estimates for 2008-09 and 6.2% as per the provisional accounts of 2008-09.

Presenting the General Budget for 2009-10 in Lok Sabha today, Mr. Mukherjee assured that the government will address the issue in right earnest to come back the path of fiscal consolidation at the earliest as this level of deficit was a matter of concern.

The Finance Minister informed that the Budget Estimates for 2009-10 provide for a total expenditure of Rs.10,20,838 crore consisting of Rs.6,95,689 crore towards Non Plan and Rs.3,25,149 crore towards Plan expenditure. At this level the Non Plan expenditure marks an increase of 37% over BE 2008-09 whereas the Plan expenditure increases by 34%. The increase in expenditure in 2009-10 BE has been pegged at 36%. The Finance Minister pointed out that the Non Plan expenditure mainly increases on account of implementation of the 6th Pay Commission recommendations, increased food subsidy and higher interest payment arising out of the larger fiscal deficit in 2008-09.

Mukherjee provided a substantially increased Defence outlay of Rs.1,41,703 crore in the budget for 2009-10 as against Rs.1,05,600 crore in BE 2008-09. He informed the Lok Sabha that the total provision for subsidies during 2009-10 has been raised to Rs.1,11,276 crore from Rs.71,431 crore in BE 2008-09.

The Finance Minister told the Lok Sabha that the gross tax receipts are budgeted at Rs.6,41,079 crore in 2009-10 as compared to Rs.6,87,715 crore in BE 2008-09, given the possibility of economic down turned persisting in the current year. He informed that the non tax revenue receipts, is likely to be better at Rs.1,40,279 crore in the current fiscal as compared to Rs.95, 785 crore in BE 2008-09. The revenue deficit is projected at 4.8% of GDP as against 1% in BE 2008-09 on 4.6% as per provisional accounts of 2008-09.