61. This has been a difficult year for the budget marked by expenditure over-runs and some deceleration in tax collection. The increase in budgeted expenditure has been 7% whereas shortfall in budgeted tax collection is estimated to be 4%. The non-plan expenditure has increased by Rs.17,461 crore (8.4% over budget estimate of Rs.2,06,882 crore) and the plan expenditure by Rs.2,395 crore (3.1% over budget estimate of Rs.77,000 crore). Major increases in non-plan expenditure are on account of pension payments (Rs.4,173 crore), interest payments (Rs.3,425 crore), Extended Ways and Means Advances to States (Rs.3,000 crore), Defence (Rs.2,810 crore), Interest subsidies (Rs.1,304 crore), food subsidy (Rs.1,000 crore), postal deficit (Rs.848 crore) and assistance to States from the National Calamity Relief Fund (Rs.1,064 crore). On the plan side, main increases are on account of National Highway Development (Rs.1,900 crore), State roads (Rs.1,000 crore), Railway safety ( Rs.200 crore), special assistance to Jammu and Kashmir and enhanced assistance to States for externally aided projects. About Rs.500 crore are expected to be released for projects/schemes in the North Eastern Region and Sikkim out of the savings from the budget of different Central Ministries.

62. Net tax revenues for the Centre are estimated at Rs.1,26,469 crore against Rs.1,32,365 crore budgeted, reflecting a shortfall of about Rs.5,900 crore. The shortfall is mainly due to lower customs revenue because of very low growth in the dollar value of non-oil imports and lower excise revenue resulting from low inflation in manufactured products for most of the year. Disinvestment receipts are expected to be Rs.2,600 crore against Rs.10,000 crore budgeted.

63. The fiscal deficit is thus likely to increase to 5.6% of GDP from the budget target of 4.0%.