With tax and other non-debt receipt not picking up pace and October showing lower y-o-y realisation, the Modi government was apparently back to cutting down on expenditure during October to stick to fiscal deficit containment, after loosening the purse strings during August-September.
Total government disbursement declined 11 per cent, revenue, non-debt capital receipts 6 per cent, and fiscal deficit 19 per cent during the month. Total revenue receipt formed 40 per cent of annual BE expectation and capital receipt only 8 per cent. Total disbursement till October accounted for 54 per cent of the annual BE expenditure, against 38 per cent share by non-debt capital and revenue receipt. Fiscal deficit formed 90 per cent of BE, much higher than 84 per cent in the comparable period in 2013-14.
Gross tax receipt declined marginally during October, after remaining in positive growth phase in the preceding three months. Cumulative growth was placed at 5.9 per cent, lower than 9.3 per cent in the first seven months of fiscal 2013-14. Reflecting subdued domestic industry, excise duty stagnated at year-ago level. Corporate tax grew at a muted 3 per cent; customs duty increased 7.1 per cent with bulk of increase taking place during August-October period. Personal income tax increased 9.2 per cent and service tax 12 per cent during April-October. Cumulative growth in non-tax receipt was 11.7 per cent, which was helped largely by bumper profit transfer by RBI in August. Barring a spurt in May, non-debt capital receipt has been running lower during the current fiscal, with the source showing 22 per cent decline till October.
Non-plan expenditure declined 2.1 per cent in October, bringing down cumulative growth to 6.3 per cent. Non-plan capex, mainly defence capital outlay, declined by a steeper 16.3 per cent. Plan expenditure dropped 35.2 per cent in October, which took the cumulative disbursement into a negative zone. Plan account revenue account disbursement declined 2.8 per cent, whereas capex was up 9.8 per cent cumulatively.