Enthused by a marked improvement in the government's fiscal performance, Finance Minister Jasawant Singh on Tuesday said the revenue deficit would be wiped out by 2005-06 -- much ahead of the schedule prescribed in the Fiscal Responsibility and Budget Management Act.

"The improvement in fiscal deficit at 4.8 per cent of GDP in 2003-04 compared to the budgeted 5.6 per cent is due to various steps. It will be further reduced," Singh said, adding revenue deficit would be brought down to 2.9 per cent and further lowered to nil by 2005-06.

The FRBM prescribes that the revenue deficit should be wiped out in 2007-08.

Giving the reasons for lowering the fiscal and revenue deficits, Singh told PTI: "It was due to better expenditure management, lower growth in subsidy bill, higher growth in revenue at 17 per cent and higher GDP growth."

"Non-plan expenditure grew by only 2 per cent while plan expenditure increased by 11 per cent," he said, adding the significant aspect was that the rise in subsidies on food, fertiliser and petroleum was only 1 per cent this fiscal as against 20 per cent growth in 2002-03.

The government's interest outgo also grew by only 5 per cent this fiscal compared to 6.5 per cent last fiscal, he said.

Moreover, revenues surged by 17 per cent this fiscal and the divestment target of Rs 13,200 crore (Rs 132 billion) was exceeded.

The receipts from sell-off would be Rs 14,500 crore (Rs 145 billion) as the government was confident of divesting 10 per cent each in stakes in Oil and Natural Gas Corporation and GAIL by March 31.