India’s fiscal deficit pushed itself out of proportion at 99% of it’s fiscal target. The deficit until November was almost all of the deficit planned for the year:
The budget for the Fiscal Deficit was 531K cr. – which means we’re just about there. The government has no room any further. It’s incredible that we spend twice the amount we earn! (Even for the full year, the budgeted revenue is 12.6 trillion – 12.6 lakh cr – and expenses are 18 lakh cr. or 18 trillion)
This is not so much of a worry: Most personal and corp taxes only come in March, and December is the next “installment” for income taxes. Plus, the government is scheduled for some non tax revenue: Sales of government stake in PSUs, the 3G auctions, the Coal auctions and so on.
The low growth in Excise is a worry. Basically we are not making things in India.
Customs growth points to high imports and there is a much healthier increase in Service Tax and Personal Income tax (non-corporate, that is), which will help. Plus, government austerity seems to have worked, with Plan Expenditure (i.e. stuff that the Planning Commission had in their plans) up less than 1%, and Non Plan expenses up 7%.
Taxes are growing at a faster rate than expenses, so it is good, but there is simply no room for any major expenses going forward. You now understand why the government chose to let the excise duty reductions for cars expire in December – they need the money.
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