Credit rating agency ICRA on Tuesday warned that fiscal deficit will cross 4.8 per cent of GDP during 2003-04, as it was projected by the government in the interim budget.

The fiscal deficit was targeted significantly lower mainly due to higher GDP growth projection of 8.7 per cent.

"However, given the current trends, GDP growth in 2003-04 is likely to be in the range of 7.5-8 per cent, which is lower than the projected 8.7 per cent," ICRA said, adding this possibly implies a higher fiscal deficit than 4.8 per cent targeted, during 2003-04.

In his interim budget, Finance Minister Jaswant Singh pegged fiscal deficit at 4.8 per cent of GDP during 2003-04 compared to the earlier estimate of 5.6 per cent.

In its report on 'Sectoral Perspectives', ICRA attributed the decline in Centre's fiscal deficit to the surge in non-debt receipts especially recoveries of loans from states.

The Centre swapped high cost loans of states with low-cost ones to increase non-debt recoveries to Rs 64,630 crore (Rs 646.30 billion) as against the budgeted Rs 18,020 crore (Rs 180.20 billion).

Moreover, the Centre got more than Rs 14,500 crore (Rs 145 billion) from divestment of PSU shares as against the budgeted Rs 13,500 crore (Rs 135 billion), ICRA said.