BOOK No .5.. H..ft

It may be pointed out that 10 Mid-Year Review of the Indian Economy 2009-2010 the performance of the economy during Q l and Q2 of 2009- 10 cannot be compared with that in the corresponding period of the previous fiscal, since the current year is witnessing the revival of the economy while in 2008-09, India was not affected by the global downturn till well into the second quarter. [...] The end-date for meeting the target of eliminating the revenue deficit as set in FRBMA was subsequently put back by a year.' One of the important elements of the FRBMA was that it put strict limits on the ability of the Central government to fall back on the RBI for meeting its deficit. [...] The fiscal deficit deteriorated due to a couple of measures taken by the Central government to counter the uncertainties faced by the domestic constituencies of the uncertainties in the global marketplace, and the shortfall in revenue receipts resulting from the fact that the domestic economy was off its recent highs. [...] While the subsidies bill helped in cushioning the price shock resulting from the high prices of petroleum products, the loan waiver scheme and the Sixth Pay Commission recommendations handed additional liquidity to the beneficiaries, which was manifest in the marketplace in the form of higher consumer demand. [...] Improvements in the receipts position of the Central government in the first six months implies that the fiscal deficit may, in fact, remain within the limits that have been indicated in the budget estimates for the current financial year.