- Fiscal deficit is a flow variable which gets added into the stock variable (public debt and liabilities) every year, thus attracting interest liability. Interest payments were placed at 4.27 lakh crore in BE 2014-15, accounting for 38.31% of non-Plan revenue expenditure and 3.3% of GDP.
- The provisional outcome of April- December 2014-15 was released on 30 January 2015 by the Controller General of Accounts (CGA). Fiscal deficit stood at 5.32 lakh crore which is 100.2% of BE and higher than the last five years’ average of 77.7%.
- The total outstanding liabilities of the central government were 55.87 lakh crore, accounting for 49.2% of GDP, comprising 39% public debt and 10.2% other liabilities at end- March 2014.
- Of total public debt, internal debt constituted 95.9% and the remaining was external debt (at book value). Total outstanding liabilities were estimated at 62.22 lakh crore in BE 2014-15.
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IMPACT OF FALLING GLOBAL CRUDE PRICES AND FUEL POLICY REFORMS Global prices of crude had stayed above $100/bbl since 2010. However, there has been a sharp downturn in these prices since September 2014. From July 2014 when they stood at $106.30/ bbl, they have fallen to below $50/bbl in January 2015. This sharp fall can be attributed to weakening of demand in the economies of Asia, especially China, and Europe. In addition, exploration of shale gas by countries like the United States and Canada to reduce their dependence on oil imports has led to lower demand for oil. This has also resulted in reduced retail prices of diesel, domestic LPG, and kerosene. In October 2014, the government has made a move towards major pricing reforms in order to rationalize the subsidy structure in the oil and gas sector. The prices of diesel have been deregulated and have become market-determined at retail level and at the refinery gate. Deregulation is expected to result in better service delivery on account of increased competition. |
