New Delhi: The Centre on Friday said it will not be easy to restrict the fiscal deficit to 4.6 percent in 2011-12 on account of uncertainty on the disinvestment front and a likely increase in subsidies, but maintained that the slippage will be minimal.
Uncertainty on account of disinvestment receipts and a likely higher subsidy requirement does make it a challenging task to adhere to the overall fiscal deficit target for 2011-12, as per a Mid-Year Analysis tabled in Parliament.
"There can be no denial that meeting the target will not be easy this year," it said, adding, "The government is, however, determined to keep overshooting of the fiscal deficit target of 4.6 percent as minimal as possible."
However, the government said the overall fiscal policy stance for the macro economy remains on the consolidation track, even though there may be a small transgression.
In the Budget, the government had estimated the fiscal deficit at Rs 4,12,817 crore, or 4.6 percent of the GDP. In the first half of 2011-12, the fiscal deficit was Rs 2.8 lakh crore, or 68 percent of the Budget Estimate (BE).
"Higher levels of fiscal deficit as a percentage of BE during the first half of 2011-12 raises some concern when compared with the five-year moving average of 54.6 percent," the mid-year review said.
However, the increase in the fiscal deficit in the first half may be seen in the context of front-loading of direct tax refunds (about Rs 62,230 crore up to September) and one-time receipt from the auction of 3G and BWA spectrum in 2010-11, it said.
Citing global and domestic factors, the government on Friday lowered the GDP growth forecast for the current fiscal to 7.5 percent from 9 percent.