Recently our Finance minister is getting worried about our fiscal situation not because we are spending more than we have budgeted this year but the revenue collection has fallen short of projection drastically.
Revenues: Our countries revenue for the year 2011-12 has been budgeted at around 8 trillion (lakh crore) so for the first quarter apr-jun 2011 we should have earned around 2 trillion (lakh crore), but in reality the revenues are only around 0.9 trillion (lakh crore), falling short by almost 53% in Q1 2011.
Expenditure: Our countries expenditure for the year 2011-12 has been budgeted at around 13 trillion (lakh crore) so for the first quarter apr-jun 2011 we should have spent around 3.1 trillion (lakh crore), but in reality we have been prudent enough to spend only 2.6 trillion (lakh crore) Q1 2011 which is 16% less than expected.
Fiscal Deficit: Even though we are prudent on spending since our revenues have fallen drastically our fiscal deficit which is expected to be 1.3 trillion (lakh crore) for the entire year is now 0.7 trillion (lakh crore) for the first quarter itself
Debt: India's public debt which is around 29.75 trillion (lakh crore) in 2010 already rose by 5.9% in first quarter to 31.49 trillion (lakh crore), thereby increasing our interest payment costs every year.
The reason for the above situation is that we had a windfall last year from the 3G spectrum sale, but this year there is no such silver bullet atleast for now.
What it means for you and me? Each one of us (1210 million population) has a debt of 26000 rupees and we need to pay an interest of 2158/- every year. Seems less until we acknowledge that we still have 41% of the population earning less than 56 rupees a day and we have only 3.3 crore (33 million) tax payers who have to share the burden.
Source: RBI, Contify Banking
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