India’s fiscal deficit in Apr-Jul at 17.2% of full-year target: CGA data | Economy & Policy News

In absolute terms, the fiscal deficit — the gap between expenditure and revenue — was Rs 2,76,945 crore as of July-end, according to data released by the Controller General of Accounts (CGA).

The deficit stood at 33.9 per cent of the Budget Estimates (BE) in the corresponding period of 2023-24.

In the Union Budget, the government projected to bring down the fiscal deficit to 4.9 per cent of the gross domestic product (GDP) in the current 2024-25 financial year. The deficit was 5.6 per cent of the GDP in 2023-24.

In absolute terms, the government aims to contain the fiscal deficit at Rs 16,13,312 crore during the current fiscal.

Unveiling the revenue-expenditure data of the Union government for the first four months of 2024-25, CGA said the net tax revenue was Rs 7.15 lakh crore or 27.7 per cent of the BE for the current fiscal.

The net tax revenue collection was 25 per cent at the July-end 2023.

The central government’s total expenditure in the four months through July stood at Rs 13 lakh crore or 27 per cent of BE. The expenditure was 30.7 per cent of the BE in the year-ago period.

Of the total expenditure, Rs 10,39,091 crore was in the revenue account and Rs 2,61,260 crore was in the capital account.

Out of the total revenue expenditure, Rs 3,27,887 crore was towards interest payments and Rs 1,25,639 crore on account of major subsidies.

CGA said Rs 3,66,630 crore has been transferred to state governments as devolution of share of taxes by the Centre up to July, which is Rs 57,109 crore higher than the previous year.

A fiscal deficit is the difference between the total expenditure and revenue of the government. It is an indication of the total borrowing that is needed by the government.

Icra Chief Economist Aditi Nayar said the Centre’s fiscal deficit more than halved to Rs 2.8 lakh in April-July FY25 from Rs 6.1 lakh crore in the year-ago period, led by a contraction in capital expenditure during the election months as well as the substantial dividend received from the RBI.

She further said the outlook for revenue receipts seems fairly favourable, while there may be a miss on capex and disinvestment targets.

Nevertheless, expenditure savings typically accumulated by ministries every year are likely to provide additional cushion to offset the shortfall from other heads, if needed, Nayar added. 

First Published: Aug 30 2024 | 6:30 PM IST