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.
MEANINGS AND WORDS
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”
