Highlights
- Revenue deficit unlikely to be zero next year
- Fiscal deficit target of 3% will be met
- Deficit targets for this year to be achieved
- States to turn in revenue surplus this year
- Tighter fiscal deficit targets proposed for coming years
The survey says it will be difficult to bring revenue deficit to zero by March next year, as mandated in the FRBM Act, because strong tax revenues seen this year are conditional on the economy continuing to grow strongly.
But the fiscal deficit target of three per cent will be achieved. The targets set for this year will be met, the Survey says because of record tax collections.
States have done much better than the Centre. All 26 states have enacted FRBM legislation and they will together turn in a revenue surplus of 0.3 per cent this year.
The survey says there is a need to reduce the fiscal deficit to below 3 percent in the coming years, to make RBI's monetary policy more effective, lower interest rates, reduce the gap with other countries and ease pressure on the rupee.
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