76. As I have already stated the most serious problem confronting the economy is the poor state of the fiscal health of both the Central and State Governments. The combined fiscal deficit of the two together is in the region of 10 per cent of GDP. I have often been described as a fiscal fundamentalist. Some have gone to the extent of calling me a fiscal terrorist. Why am I so concerned about the fiscal deficit? Let me try to explain. The total receipts of the Central Government in the current year according to BE are about Rs 281,000 crore. Of this amount, Rs 72,000 crore is States’ share of the Central taxes and grants. The Central Government is, therefore, left with Rs 209,000 crore. On the expenditure side, about Rs 101,000 crore was to be spent on interest,
Rs 59,000 crore on defence, Rs 23,000 crore on major subsidies and Rs 16,000 crore on pensions. The net amount left for meeting all other Government expenditure totalling Rs 123,000 crore was, therefore, only Rs 12,000 crore. I have, therefore, to borrow Rs 111,000 crore in the current year to make both ends meet. The most worrisome aspect is that over 70 per cent of my borrowing, i.e., Rs 77,000 crore was for financing unproductive revenue expenditure. This will add to my interest burden next year forcing me to borrow more and ultimately fall into a debt trap. I am deeply conscious of the burden which is being placed on future generations, by our extravagance. I cannot allow this situation to continue.