31 DECEMBER 2018
Mind the gap
Revenue trends underline the government’s challenge on the fiscal consolidation front
Eight months into the financial year, the Centre’s fiscal deficit has already overshot the full year’s budget estimate by as much as Rs. 92,349 crore. And given last year’s fiscal slippage — the deficit in the revised estimates for 2017-18 was 3.5% of GDP, wider than the 3.2% originally targeted — the augury is far from reassuring. While total expenditure growth, at 9.1% so far this year, has remained below the budget projection for a 10.1% increase, worryingly growth-inducing capital spending is set on an underwhelming trajectory. The 4% increase over the eight-month period is less than half the 9.9% growth the Centre had budgeted for the year. However, it is the trends in revenue that give cause for disquiet. In his annual budget presented in February, Finance Minister Arun Jaitley had projected revenue receipts to show a healthy 14.6% increase from the revised estimates for the preceding year, on the back of a 16.6% jump in net tax revenue. Granting that tax revenue does tend to bunch up and get skewed with an upward bias into the final quarter, the April-November revenue receipts and net tax revenue growth numbers, at 8.1% and 4.6% respectively, are far from reassuring. If there is a silver lining on the revenue front, it is the buoyancy seen in non-tax revenue, which surged more than 31%, putting the government comfortably on track to meet the budget estimate for a 3.9% increase. Still, non-tax revenue is budgeted to account for just over a seventh of total revenue and it is hard to see it helping bridge anything more than the smallest of shortfalls in tax receipts.
There is another factor to contend with in sizing up the fiscal calculus this year. With the general election only a few months away, the government needs to avoid the temptation to open the spigot with an eye on the political benefits that it may see accruing. Some of the expenditure plans it has committed to recently have either been factored in or will at most impact the margins — be it public sector bank recapitalisation or an increase in the quantum of incentives for the export of onions to reverse the slide in prices. But the bigger challenge remains in finding ways to rustle up the requisite revenue to keep the deficit from slipping for a second year running. The seven public sector enterprises that have been cleared by the Cabinet for share sales as part of the disinvestment programme are, at best, only likely to partly help meet the budgeted non-debt capital receipts target of Rs. 92,199 crore. As the Reserve Bank never tires of cautioning, the onus is on the government to avoid further fiscal slippage as it could hurt the economy by crowding out vital private investment. This at a time when it has just been showing signs of a revival.
HIV reality check
Two lives, of a donor and a recipient, are devastated by lapses in blood screening
A 23-year-old pregnant woman in Tamil Nadu tested positive for HIV after receiving a unit of blood at a government hospital blood bank, indicating glaring lapses in screening procedures. The blood was donated on November 30 and transfused to the pregnant woman on December 3. Testing all donated blood units for a number of transfusion-transmissible infections, including HIV, is mandatory in India. The ELISA test used in all blood banks to screen for HIV has very high levels of sensitivity to diagnose samples positive for the virus. It can be said with certainty that the blood bank had failed to screen the blood for HIV. The question of testing the donated blood for HIV during the window period (the time between potential exposure to HIV and when the test reveals for sure if the person has HIV) does not arise as the donor’s HIV-positive status became known in 2016 when he donated blood at the same blood bank. Since 2004, prior to donation, all blood banks are required to obtain from donors written consent as to whether they wish to be informed about a positive test result. In case a donor tests positive for HIV, blood banks are required to refer the donors to designated voluntary counselling and testing centres (VCTCs) for disclosure and counselling. That the blood bank tried but failed to contact the donor in 2016 indicates that the donor had consented to be informed of a positive result. In a further tragic twist, he found out elsewhere that he was HIV-positive, and dutifully contacted the hospital on December 10, but his blood had already been transfused by then. On Sunday he passed away after consuming poison.
Studies show that blood banks in India have a success rate of less than 50% in contacting donors who have tested positive for transfusion-transmissible infections. Under the 2004 National AIDS Control Organisation (NACO) Action Plan, VCTCs are required to inform the blood bank of a donor’s HIV-positive status to stop the person from donating blood in the future only when the confirmatory test done at the VCTC too is positive. Since only half of the consented donors are contactable and even fewer visit a VCTC, it is imperative that NACO finds a viable alternative without compromising the donor’s identity. The focus should also be on creating awareness among donors to visit a VCTC to confirm their HIV status when alerted by blood banks. After all, timely confirmation helps donors start on early treatment to keep the virus under check and take precautionary measures to reduce the risk of infecting their partners and others through sexual and other kinds of contact and through blood donation. After winning a protracted battle to keep away professional donors from donating blood by encouraging voluntary donation, it is time blood banks and NACO worked to make safe blood availability a reality at all times.