India's fiscal deficit showed a notable improvement in the first quarter of the current financial year, reflecting a decline compared to the same period last year. According to data released by the Finance Ministry, the fiscal deficit for April to June stood at 8.1 percent of the full year's estimate. This marks a significant drop from the 25.3 percent recorded in the same quarter of the previous year.
At the end of June, the fiscal deficit was reported to be Rs 1.36 lakh crore. This reduction can be attributed to a surge in tax collections and a substantial dividend payment from the Reserve Bank of India (RBI), amounting to Rs 2.11 lakh crore. These factors have played a crucial role in constraining the fiscal deficit.
Revenue receipts during this period were notably higher, reaching Rs 8.3 lakh crore, which constitutes 26.5 percent of the full year's target. This is an improvement from the 22.4 percent achieved in the first quarter of the previous financial year. Additionally, tax revenue accounted for 21 percent of the annual estimate, up from 18.6 percent in the previous year.
The government's expenditure for the quarter reached 20 percent of its total budgeted expenditure of Rs 48.2 lakh crore for the current fiscal year. This indicates that spending is in line with the planned fiscal targets.
Finance Minister Nirmala Sitharaman, in her Union Budget for 2024-25, has set the fiscal deficit target at 4.9 percent of the GDP, down from 5.1 percent in the previous financial year. Sitharaman reaffirmed the government's commitment to fiscal consolidation, aiming to further reduce the deficit to 4.5 percent in the following year.
The revenue receipt target for FY25 has been adjusted to Rs 31.3 lakh crore, up from Rs 30 lakh crore as proposed in the interim budget. Meanwhile, capital expenditure (capex) spending has been maintained at Rs 11.11 lakh crore, a move intended to stimulate economic growth.
This progress in managing the fiscal deficit and increasing revenue receipts reflects the government's ongoing efforts to maintain fiscal discipline while supporting economic growth through strategic spending and revenue enhancement measures.
Follow us
