Fiscal deficit down in '04-05

NEW DELHI: India just got better for global investors and lenders. Government has achieved significant corrections in its finances in 2004-05, keeping deficit down to levels lower than it had budgeted for.
This sends out positive signals to global investors, credit rating agencies and lending bodies like World Bank and IMF which have been wary of the state of India''s public finance.Better performance could help India attract higher capital inflows and access global funds at softer terms.
Global rating agency Standard & Poor''s said on Wednesday that government''s fiscal data are encouraging but it is too early for a rating upgrade yet.
The provisional accounts for 2004-05 released by the Controller General of Accounts here on Tuesday put the fiscal deficit at almost Rs 10,000 crore less than the figure in the budget estimates. Fiscal deficit is the gap between government''s total expenditure and receipts. It signifies the total borrowing needs of government.
In the first year of the Fiscal Responsibility and Budget Management (FRBM) Act, fiscal deficit as a proportion of GDP has come down to 4.1% in 2004-05 from 4.5% in 2003-04. Significantly, 2004-05 ended with deficit level less than 4.4% in the budget estimates and 4.5% in the revised estimates.
In the current year''s Budget, FM has targeted deficit at 4.3% of GDP.