For the first time, the Centre on Wednesday admitted that it may miss the budget targets for fiscal and revenue deficits for 2008-09 as global financial crisis is exerting pressure.
"Thanks to the global financial crisis, which is exerting pressures on all economies, it is likely that we may overshoot budget targets (for fiscal and revenue deficits)," Finance Minister P Chidambaram said at USAID function in New Delhi.
According to the budget estimates, the Centre would be bringing down the fiscal deficit below the three per cent and revenue deficit to 1-1.1 per cent this year, Chidambaram said. However, he said, the government will do its best to remain as close to the targets as possible.
"If we are not able to achieve the targets by 31.03.2009, I am sure we can achieve them by 31.3.2010. I often console myself by saying that we waited odd 60 years to achieve some fiscal discipline, it does not matter to wait for one more year," he said.
Fiscal deficit represents excess of government's total expenditure over total income (excluding market borrowing), while revenue deficit is the difference between the current expenditure and current receipts.
The Budget for 2008-09 targets to cut fiscal deficit to 2.5 per cent of GDP and revenue deficit to one per cent of GDP.
The Fiscal Responsibility and Budget Management (FRBM) Act binds the government to cut fiscal deficit to three per cent of GDP by 2008-09 or 0.3 per cent every year.
Revenue deficit is targeted to be reduced to nil in five years by 2008-09 or 0.5 per cent every year.
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Posted: Oct 22, 2008 at 1252 hrs IST
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