Govt struggling its way to reach 4.1% FY15 deficit target

The central government has pulled out all stops in order to reach the 2014-15 fiscal deficit target of 4.1 percent it outlined in the Budget this year.

The government’s struggle comes because of a Rs 45,000 crore fiscal gap it has witnessed this year due to a shortfall in tax revenues, spectrum proceeds and divestment receipts.

Out of this, about Rs 21,000 crore shortfall is due to tax shortfall while another big hole in the government’s finances was created after the Supreme Court barred it from forcing telecom companies to pay part of the spectrum auction proceeds this year itself.

Sources have told CNBC-TV18 that the government has decided to not to relax the 15 percent March expenditure limit or the 33 percent January-March limit that it had set earlier. These are generally relaxed late into the year if the fiscal deficit target is close to being met.

However, sources further added that finance ministry officials are confident the government will be able to meet the target eventually.