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Macroeconomic and Monetary Developments in 2005-06
-Announced on the 17th April 2006

Fiscal Situation

The revised estimates for 2005-06 placed the key deficit indicators of the Central Government lower than the budgeted levels. This was enabled mainly by compression undertaken in non-Plan expenditures in respect of interest payments, subsidies, grants to the States and defence expenditure.

As per Reserve Bank records, during 2005-06, gross and net market borrowings (excluding issuances under the Market Stabilisation Scheme) of the Centre amounted to 97.3 per cent and 94.3 per cent of the budget estimates as compared with 70.6 per cent and 51.0 per cent, respectively, a year ago.

During 2005-06, the States raised Rs.21,729 crore, i.e., 84 per cent of their gross allocation.

The weekly average utilisation of WMA and overdraft by the States during 2005-06 was significantly lower than that during the previous year.

The Union Budget 2006-07 committed to resume the path of fiscal consolidation under the FRBM so as to eliminate the revenue deficit by 2008-09. The key deficit indicators, viz., gross fiscal deficit, revenue deficit and primary deficit, as per cent of GDP, are budgeted to be lower in 2006-07 than the previous year's level.

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Click Here For Annual Policy Statement for the Year 2006-07

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