Chidambaram faces mounting deficit in election year

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ChidambaramThe fiscal deficit in the first three quarters inched closer to the budgeted target for the whole year, suggesting the finance minister of Asia’s third-largest economy faces a challenge to meet the target.

The government is facing a shortfall in tax collections and revenue receipts from the sale of government shares in state-run companies as economic growth slows to less than 5 percent this fiscal year, from near double digits before the 2008 global crisis.

However, the subsidy bill – mainly for selling oil, fertiliser and food at cheaper rates – is likely to touch near Rs. 3 lakh crore, against a budgeted target of Rs. 2.21 lakh crore.

The fiscal deficit reached Rs. 5.16 lakh crore during April-December, or 95.2 per cent of the full-year target, compared with 78.8 per cent a year earlier, government data showed on Friday.

Net tax receipts were at Rs. 5.18 lakh crore in the first nine months of the current fiscal year to March 2014, while total expenditure was Rs. 11.64 lakh crore.