New Delhi: The government has succeeded in keeping its fiscal deficit at a three-year low of 68.1% of its full-year target of 5.6 trillion in the first six months of the fiscal year (April-September) as revenue receipts have picked up and non-Plan expenditure remained within target.

According to data released by the Controller General of Accounts, Plan expenditure stood at 54.6% of the full-year target, higher than 42.8% during the same period last year, while non-Plan expenditure remained at 50% of the target till September, against 50.5% during the same period a year ago.

In 2014-15, the government exhausted 82.6% of its fiscal deficit target in the April-September period.

The World Bank on Thursday said a likely rise in oil prices, a drop in corporate tax rates and the burden of the Seventh Pay Commission (which will increase salaries of government employees) will make it tough for the government to stick to its fiscal consolidation road map starting 2016-17.

The government has said it will bring down fiscal deficit to 3.9% of gross domestic product (GDP) in 2015-16, and to 3.5% and 3% in the next two years.

It has admitted that it may narrowly miss the direct tax target, while robust growth in indirect taxes will more than offset this shortfall.

However, the lacklustre disinvestment so far this fiscal year may also pose a threat to meeting the fiscal deficit target, if the government does not keep its finances under control in the second half of the year.

Finance minister Arun Jaitley, earlier this week, said lower receipts will not upset the fiscal math and there will be no difficulty in meeting the fiscal deficit target of 3.9% set for the current fiscal year. “I don’t think there are any concerns (on fiscal deficit)... I had consciously kept a very modest fiscal deficit target. The manner in which tax revenues and expenditure are moving, I don’t see any difficulty," he said.

Admitting that disinvestment is a challenge mainly on account of global problems, Jaitley said “metal stocks are not doing particularly well, and metal was a large part of the kitty that we had planned for this year. I don’t think it makes sense divesting at a time when prices are low".

The government had budgeted raising 69,500 crore through disinvestment in the current fiscal year. Of this, 41,000 crore was to come from minority stake sale in public sector undertakings (PSUs) and another 28,500 crore from the sale of strategic stakes.

With seven months of the current fiscal year over, the government has been able to sell stakes in just four companies—Power Finance Corp. Ltd, Rural Electrification Corp. Ltd, Dredging Corp. of India Ltd and Indian Oil Corp. Ltd—to net 12,600 crore.

Minister of state for finance Jayant Sinha on Tuesday said that the disinvestment process is challenging because of the global slowdown in commodities and many identified public sector units are from this space. “Whether it is Coal India or oil marketing companies, they are impacted by global commodity prices," Sinha said at an event in Mumbai.

PTI contributed to this story.

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