The effects of the economic slow down due to the global financial crisis, has resulted in a five per cent fall in excise and customs collection during October. The decline in indirect tax collection comes at a time when the government is finding it hard to mobilize resources, while expenditure on subsidies and other welfare measures is going up.

The excise collection, decreased by 8.7 per cent to Rs 18,664 crore as against Rs 19,646 crore during the same period a year ago, while customs duty collections declined by 0.9 per cent to Rs 9,265 crore from Rs 9,353 crore in October 2007.

Prime Minister Manmohan Singh, talking about the global financial meltdown said, "A crisis of this magnitude was bound to affect our economy and it has. International credit has shrunk with adverse effects on our corporates and our banks."

The government, in the Budget proposed to reduce the fiscal deficit to 2.5 per cent of GDP from 3.1 in the previous year, while the revenue deficit was slated to be brought down to one per cent from 1.4 per cent. However, declining revenue from major heads like customs and excise, coupled with an additional expenditure of over Rs one lakh crore, approved by Parliament recently, will derail the targets for the fiscal and revenue deficits envisaged in the Budget.