THERE is a large upside risk to the budgeted amount of fertiliser subsidy as prices have risen significantly
Declining revenue growth and rising expenditure may push up the fiscal deficit during the current
financial year to 5.12 per cent, against the target of 4.6 per cent of the GDP, industry body Ficci said today.
Fiscal deficit is the gap between overall expenditure and receipts. Containing expenditure growth at 3.4 per cent for 2011- 12 will be difficult given that trend estimates reveal expenditure growth at 20 per cent for the five- year period ended March 2011, it said.
” There is also the possibility of an even worse outcome, in which case the projected fiscal deficit target could be even higher than 5.12 per cent of GDP,” it said, adding the lurking fear of expenditure overrun gets more real considering among others, the case of subsidies. The government is aiming to restrict its fiscal deficit to 4.6 per cent in the 2011- 12, from 4.7 per cent last year.
There is a large upside risk to the budgeted amount of fertiliser subsidy as fertiliser input prices have increased significantly in the recent months, it said, adding that food subsidies may be also higher, given the introduction of National Food Security Bill.