Going by CGA data, central government finance has deteriorated sharply during April-June 2014, the first quarter of the ongoing fiscal 2014-15. At 56.1 per cent, the ratio of fiscal deficit, the net borrowing to bridge the gap between expenditure and non-debt revenue and capital receipt, to annual budgeted borrowing was at a five-year high – the ratio was 48.4 per cent during the corresponding period of the preceding year, around 38 per cent average in the earlier two yeas, and a low of 11 per cent during the corresponding of 2010-11. In absolute amounts, however, the growth rate in fiscal deficit showed a slowdown from 38 per cent to 22 per cent.
Following the pattern in early months of the fiscal, on one hand total non-debt receipt declined 3.1 per cent while on the other disbursements increased 8 per cent. Q1 in 2013-14 had shown 1.4 per cent decline in receipt and 23 per cent increase in total expenditure.
Revenue receipt was down 2.4 per cent, twice the measure of decline in Q1 of 2013-14. Net tax receipt dropped 2.8 per cent and non-tax receipt remained at the year-ago level. Corporate tax, customs and excise duty collection were lower, even as personal income tax and service tax raising were 15 per cent and 19 per cent more, respectively. Obviously, industry is still downbeat, though services appear to be escaping erosion. Non-debt capital receipt eroded 39 per cent y-o-y.
Capex declines, so does plan expenditure
In disbursements, non-plan expenditure slowed from 18.7 per cent to 12.9 per cent. Interest payment shot up 48 per cent, against 40 per cent in Q1 of 2013-14. Plan expenditure declined 2.6 per cent, against 33 per cent increase in this period a year ago. Non-plan capex dropped 19 per cent, which is in complete contrast to 33 per cent increase in this period a year ago. Defence capital outlay showed 30 per cent drop.
Likewise, plan account capex was 8.6 per cent lower (41 per cent increase). Non-plan account revenue expenditure increased 17.5 per cent and the same on plan account 11 per cent. Faster increase in non-plan expenditure, vis-à-vis plan account and in capital expenditure vis-à-vis revenue account in Q1, run counter to the focus reflected on plan account and capex disbursement in the annual budget data.