New Delhi: Bettering its own financial targets, the government has contained the fiscal deficit at 4 per cent of GDP for 2014-15 at Rs 5,01,880 crore.
The revenue deficit has also been confined to 2.8 per cent, beating the budget target of 2.9 per cent for the last fiscal, the Finance Ministry said in a statement today.
The gross tax collection registered a growth of 9 per cent in 2014-15 and stood at Rs 12,45,037 crore.
The fiscal deficit target was set at 4.1 per cent by the the UPA government, but Finance Minister Arun Jaitley had said he was taking it as a “challenge” to meet this ambitious and “daunting target” set up by his predecessor P Chidambaram.
Fiscal deficit, the gap between the government's expenditure and revenue, is lower than the downwardly revised estimate of 4.1 per cent provided by the Modi government's first full Budget announced in February.
“As a result of prudent policies and commitment to fiscal consolidation, the fiscal deficit at the end of 2014-15, stands at Rs 5,01,880 crore which is 98 per cent of the projected figure in Revised Estimate for 2014-15. Fiscal deficit as a percentage of GDP is 4.0 per cent as against the RE of 4.1 per cent,” the Finance Ministry said.
“Revenue deficit at the end of 2014-15 is Rs 3,58,306 crore which is 99 per cent of the projected figure in the RE 2014-15 and is 2.8 per cent of the GDP as against the RE of 2.9 per cent,” the statement added.
Revenue deficit refers to the shortfall in total government revenue realisation from the targeted figure.
The Finance Ministry further said that the government is “firmly committed to the path of fiscal consolidation and this is a step forward”.
Devolution of tax collections to states at the end of 2014-15 was Rs 3,37,808 crore, which is higher by Rs 19,578 crore over the previous financial year.
The Non Tax Revenue stood at Rs 1,96,959 crore (90 per cent of Revised Estimate).
Plan Expenditure at the end of 2014-15 stood at Rs 4,35,621 crore while Non-Plan Expenditure during the same year has been Rs 11,91,140 crore (99.8 per cent of RE), the statement said.
As per the fiscal consolidation road map outlined in the Budget 2015-16, fiscal deficit is to be brought down to 3.9 per cent of GDP in the current fiscal, then to 3.5 per cent in 2016-17 and further to 3 per cent by 2017-18.
The 3 per cent target would now be reached a year later than planned earlier.
The lower fiscal deficit reduces the government's expenditure on interest payment and unlocks funds for investments in social welfare programmes as well as infrastructure development.