Centre's fiscal deficit widens to Rs. 7L crore in April-September
The Indian government's fiscal deficit expanded to Rs. 7.02 lakh crore during April-September, up from Rs. 6.43 lakh crore in April-August, as reported by the Controller General of Accounts. The fiscal deficit for the first half of the current financial year represents 39.3% of the full-year target of Rs. 17.87 lakh crore, compared to 37.3% during the same period in 2022.
Robust tax collections aid fiscal deficit reduction
For the second month in a row, the Centre's fiscal deficit decreased, reaching Rs. 59,035 crore in September, a 25% year-on-year drop. This decline was fueled by strong tax collection growth, with net tax revenue increasing 14.3% year-on-year to Rs. 3.56 lakh crore in September. Corporate tax collections surged by 26.6% to Rs. 2.12 lakh crore, while personal income tax collections climbed by 15.6% to Rs. 91,247 crore.
Encouraging trend in tax collection targets
Aditi Nayar, Chief Economist at ICRA, remarked on the tax collection trends. He said, "With a 27% rise in corporation tax collections in September amidst healthy advance tax inflows, nearly 49% of the 2023-24 BE (Budget Estimate) had been collected, which is an encouraging trend." She also observed that half the personal income tax target of the 2023-24 BE was reached during April-September.
Capex push continues with increased spending on investments
Regarding expenditures, the government's focus on capital expenditure (capex) persisted, with investment spending growing by 29% in September and 43.1% in April-September, totaling Rs. 4.91 lakh crore. The central government's capital expenditure has now surpassed the Rs. 5 lakh crore milestone.
