Press Information Bureau

Government of India

Ministry of Finance

16-March-2012 13:50 IST

Fiscal Deficit to be Brought Down to 5.1% of GDPIN 2012-13 From 5.9% In 2011-12

The Fiscal Deficit in the Union Budget 2012-13 has been pegged at Rs.5,13,590 Crore which is 5.1% of the GDP. In 2011-12 RE, it was 5.9% of the GDP and Rs.5,21,980 Crore in absolute terms. After taking into account other items of financing, the net market borrowings through dated securities through finance this deficit is Rs.4,79,000 Crore. With this the total debt stock at the end of 2012-13 would work out at 45.5% of GDP as compared to the 13th Finance Commission target of 50.5% of GDP. The effective revenue deficit in BE 2012-13 works out to Rs.1,85,752Crore which is 1.8% of GDP.

This has been achieved due to various steps taken by the Government for fiscal consolidation despite fall in the direct tax collectionsby Rs.32,000 Crore and the Government absorbing duty reduction in petroleum sector with annual revenue loss of Rs.49,000 Crore in the year 2011-12. The Government also had to incur higher expenditure on petroleum and fertilizer subsidy to insulate people from the rising prices.

DSM/RS/JR/26

Fiscal deficit target narrows under fiscal consolidation, shaping borrowings and projected public debt trajectory. The Union Budget for 2012-13 targets the Fiscal Deficit at 5.1% of GDP with net market borrowings through dated securities after other financing items, and projects total debt stock at 45.5% of GDP; the Effective Revenue Deficit is identified as a specified share of GDP. The reduction in the fiscal gap is attributed to fiscal consolidation measures taken despite lower direct tax collections, revenue losses from petroleum duty reductions, and higher petroleum and fertilizer subsidy spending to moderate consumer prices.