April-Nov fiscal deficit rises to $66.3 billion

April-Nov fiscal deficit rises to $66.3 billion

New Delhi: India’s fiscal deficit for the first eight months of the financial year ballooned to Rs3.53 trillion ($66.3 billion), or nearly 86% of the full-year target, reinforcing expectations the government will be forced to tap the bond market for additional borrowing.

The deficit in revenue receipts was 91.3% of the full-year target after eight months, compared with about 51% last year, government data showed on Friday.

Net tax receipts were Rs3.2 trillion while total expenditure was Rs7.61 trillion for April-November.

Separately, the government said India’s total external debt rose to $326.6 billion at the end of September, from $317 billion at the end of June.

Earlier this month, the government had said the external debt continued to remain within manageable limits.

New Delhi budgeted a fiscal deficit of 4.6% of gross domestic product for fiscal year 2011-12 in February, but many private economists see the deficit for the year overshooting by a full percentage point on slowing growth and weak government finances.

New Delhi has acknowleged that meeting the fiscal gap target would be a “great challenge", but officials said they would try to keep the deficit under 5 percent of GDP by pruning expenditure.

Any slippage on the fiscal gap target could force the cash-strapped government to borrow more from the market. It has already unveiled Rs52,800 crore of extra borrowing for the remainder of this year.