India's fiscal deficit for the first six months of this fiscal year through September stood at ₹7.02 lakh crore, or 39.3% of annual estimates, government data showed on Tuesday (October 31). It was ₹6.19 lakh crore during the corresponding period of last fiscal.

Share Market Live

NSE

The fiscal deficit for April-September 2022 was 37.3% of the target for 2022-23.

The Centre has set a target of ₹17.87-lakh crore which is 5.9% of GDP which was 6.4% in the last financial year. Fiscal deficit is difference between income and expenditure. It is an indication of the total borrowings that are needed by the government.

For the second consecutive month, the Centre's fiscal deficit was lower compared to the year-ago period, coming in at ₹59,035 crore in September, down 25% year-on-year. This was aided by continued robust growth in tax collections.

Total receipts stood at ₹14.17 lakh crore as against ₹12.03 lakh crore on-year, while overall expenditure in April to September was at ₹21.19 lakh crore versus ₹18.23 lakh crore. They were 52.2% and 47.1% of this fiscal year's budget target.

Revenue deficit was at ₹2.31 lakh crore or 26.6% of the fiscal year's budget target, data showed. It was ₹3.11 lakh crore in the year-ago period.

The tax revenue stood at ₹11.60 lakh crore or 49.8% of the annual target. During April-September 2022-23, the net tax collection was 52.3% of that year’s annual Budget Estimate (BE).

"The Government of India's fiscal deficit rose to ₹7.0 trillion or 39% of the FY2024 BE in H1 FY2024 from ₹6.2 trillion in H1 FY2023, amidst an upfronting of tax devolution (to ₹4.6 trillion from ₹3.8 trillion). While net tax revenues rose by 15%, non tax revenues expanded by 50% on the back of the RBI dividend, amidst a 10% growth in revenue expenditure, and a significant 43% YoY expansion in capex," said Aditi Nayar, Chief Economist, Head - Research & Outreach at ICRA.

While announcing the federal budget for this fiscal year, Union Finance Minister Nirmala Sitharaman said that India aims to narrow the fiscal gap to 5.9% of gross domestic product from 6.4% in the last financial year. The fiscal deficit was 6.4% of the GDP in 2022-23 against the earlier estimate of 6.71%.

"To meet the FY2024 budget estimate, the GoI has to release ₹5.66 trillion to the states in the next six months, which is nearly the same as the amount devolved in Oct-March in FY2023 as per ICRA's calculations (₹5.72 trillion)," Nayar said.

"Higher than budgeted dividend surplus transfer of ₹874.2 billion from the RBI is likely to provide some cushion to meet any undershooting in other revenues streams including disinvestment or potential overshooting in expenses, relative to respective BE, such as MGNREGA and LPG subsidy," Nayar added.

First Published:Oct 31, 2023 4:16 PM IST