The Hindu Business Line : Slippages feared in second half on relief, subsidies

THE reasonable levels of fiscal discipline and rectitude recorded in the first half of 2002-03 may give way to significant slippages in the second half, courtesy the impact of additional drought relief expenditures and higher outgo on subsidies.

According to the Mid-Year Review, the Centre's gross fiscal deficit during April-September 2002, at Rs 57,746 crore, has been only marginally higher than the Rs 57,262 crore figure for the corresponding period last year.

The Centre's gross tax revenues in the first six months of the current fiscal have been 16.9 per cent higher, with net collections growing by an impressive 27 per cent. During April-September 2002, gross revenues from direct taxes (corporation plus income) stood at Rs 29,761 crore against Rs 24,487 crore during April-September 2001 (up 21.5 per cent), with the corresponding figures being Rs 34,275 crore, Rs 28,668 crore and 19.6 per cent for excise and Rs 21,445 crore, Rs 20,011 crore and 7.2 per cent for customs.

Total revenue receipts of the Centre have grown by 15.9 per cent (from Rs 79,203 crore during April-September 2001 to Rs 91,826 crore during April-September 2002), while the growth in total expenditure has been reined in 12 per cent (Rs 1,62,450 crore versus Rs 1,45,038 crore). Further, total expenditure in the first half has been 39.6 per cent of the budgeted figure for the year.

"After a disappointing performance on the fiscal front in 2001-02 (which witnessed a near Rs 20,000 crore slippage on the budgeted fiscal deficit), the first half of the current year has witnessed some progress in fiscal consolidation," the Review has noted, adding that the revenue and expenditure trends so far "have been more or less satisfactory."

The Review has warned that the remainder of the year could see some pressure on both revenue and expenditure. "Unanticipated weakening of the growth momentum may affect revenue collections. The Review has observed that expenditure on food and fertiliser subsidies had gone up rapidly in the first half of the fiscal itself (growth rate of 62.6 per cent, against 6.2 per cent during April-September 2001).

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