Topic Of The Day:-“Mind The Gap: On Fiscal Deficit”

Revenue Trends Underline The Government’s Challenge On The Fiscal Consolidation Front

Eight months into the financial year, the Centre’s fiscal deficit has already overshot the full year’s budget estimate by as much as ₹92,349 crore. And given last year’s fiscal slippage — the deficit in the revised estimates for 2017-18 was 3.5% of GDP, wider than the 3.2% originally targeted — theaugury is far from reassuring. While total expenditure growth, at 9.1% so far this year, has remained below the budget projection for a 10.1% increase, worryingly growth-inducing capital spending is set on an underwhelming trajectory. The 4% increase over the eight-month period is less than half the 9.9% growth the Centre had budgeted for the year. However, it is the trends in revenue that give cause for disquiet. In his annual budget presented in February, Finance Minister Arun Jaitley had projected revenue receipts to show a healthy 14.6% increase from the revised estimates for the preceding year, on the back of a 16.6% jump in net tax revenue. Granting that tax revenue does tend to bunch up and get skewed with an upward bias into the final quarter, the April-November revenue receipts and net tax revenue growth numbers, at 8.1% and 4.6% respectively, are far from reassuring. If there is a silver lining on the revenue front, it is thebuoyancy seen in non-tax revenue, which surged more than 31%, putting the government comfortably on track to meet the budget estimate for a 3.9% increase. Still, non-tax revenue is budgeted to account for just over a seventh of total revenue and it is hard to see it helping bridge anything more than the smallest of shortfalls in tax receipts.

There is another factor to contend with in sizing up the fiscal calculus this year. With the general election only a few months away, the government needs to avoid the temptation to open the spigot with an eye on the political benefits that it may see accruing. Some of the expenditure plans it has committed to recently have either been factored in or will at most impact the margins — be it public sector bank recapitalisation or an increase in the quantum of incentives for the export of onions to reverse the slide in prices. But the bigger challenge remains in finding ways torustle up the requisite revenue to keep the deficit from slipping for a second year running. The seven public sector enterprises that have been cleared by the Cabinet for share sales as part of the disinvestment programme are, at best, only likely to partly help meet the budgeted non-debt capital receipts target of ₹92,199 crore. As the Reserve Bank never tires of cautioning, the onus is on the government to avoid further fiscal slippage as it could hurt the economy by crowding out vital private investment. This at a time when it has just been showing signs of a revival.


1) deficit

Meaning : an excess of expenditure or liabilities over income or assets in a given period.(n)

Synonyms : shortfall

Antonyms : enough

Example : “an annual operating deficit”

2) slippage

Meaning : failure to meet a standard or deadline; the extent of this.

Synonyms : glide

Antonyms : escalation

Example : “slippage on any job will entail slippage on the overall project”

3) revised

Meaning : reconsider and alter (something) in the light of further evidence.

Synonyms : adjusted

Antonyms : kept

Example : “he had cause to revise his opinion a moment after expressing it”

4) augury

Meaning : a sign of what will happen in the future; an omen.

Synonyms : boding

Example : “they heard the sound as an augury of death”

5) reassuring

Meaning : say or do something to remove the doubts and fears of (someone).(v)

Synonyms : assure

Antonyms : annoy

Example : “he understood her feelings and tried to reassure her”

6) inducing

Meaning : succeed in persuading or leading (someone) to do something.

Synonyms : activate

Antonyms : destroy

Example : “the pickets induced many workers to stay away”

7) underwhelming

Meaning : fail to impress or make a positive impact on (someone); disappoint.(v)

Synonyms : disappoint

Example : “American voters seem underwhelmed by the choices for president”

8) disquiet

Meaning : a feeling of worry or unease.(n)

Synonyms : anxiety

Antonyms : calm

Example : “public disquiet about animal testing”

9) bunch

Meaning : a number of things, typically of the same kind, growing or fastened together.(n)

Synonyms : assortment

Antonyms : individual

Example : “a bunch of grapes”

10) skewed

Meaning : make biased or distorted in a way that is regarded as inaccurate, unfair, or misleading.

Synonyms : bias

Antonyms : maintain

Example : “the curriculum is skewed towards the practical subjects”

11) reassuring

Meaning : cause or enable (a condition or situation) to continue.(v)

Synonyms : continue

Antonyms : abandon

Example : “the need to maintain close links between industry and schools”

12) buoyancy

Meaning : the ability or tendency of something to float in water or other fluid.

Synonyms : elasticity

Antonyms : depression

Example : “the drum’s buoyancy forced it up again”

13) contend

Meaning : struggle to surmount (a difficulty).

Tamil Meaning : போராட

Synonyms : confront

Antonyms : agree

Example : “she had to contend with his uncertain temper”

14) temptation

Meaning : the desire to do something, especially something wrong or unwise.

Synonyms : allurement

Antonyms : dislike

Example : “he resisted the temptation to call Celia at the office”

15) accruing

Meaning : (of a benefit or sum of money) be received by someone in regular or increasing amounts over time.

Synonyms : accumulate

Antonyms : disperse

Example : “financial benefits will accrue from restructuring”

16) rustle

Meaning : a soft, muffled crackling sound like that made by the movement of dry leaves or paper.(v)

Synonyms : crackle

Antonyms : silence

Example : “there was a rustle in the undergrowth behind her”

17) requisite

Meaning : made necessary by particular circumstances or regulations.(adj)

Synonyms : essential

Antonyms : nonessential

Example : “the application will not be processed until the requisite fee is paid”

18) revival

Meaning : an improvement in the condition, strength, or fortunes of someone or something(n).

Synonyms : recovery

Antonyms : destruction

Example : “a revival in the fortunes of the party”