India's April-October fiscal deficit narrows to Rs. 8.04L crore
India's fiscal deficit from April to October this year reached Rs. 8.04 lakh crore, which is 45% of the annual target of Rs. 17.87 lakh crore, as reported by the Controller General of Accounts. This is a slight improvement from last year's 45.6% during the same period. The government aims to lower the fiscal gap to 5.9% of GDP in FY24, down from 6.4% the previous year.
Fiscal deficit in October down 26% YoY
For the third month in a row, the central government's fiscal deficit was lower than the same period last year, at Rs. 1.02 lakh crore in October, a 26% year-on-year (YoY) decrease. This decline is due to government spending shrinking more than its income. In October, total government expenditure dropped 14% YoY to Rs. 2.75 lakh crore, with capital expenditure falling 15% to Rs. 56,296 crore.
Centre is on track to meet its full-year capex target
Despite the dip in capital expenditure in October, the central government is on track to achieve its record capex target of Rs. 10 lakh crore for the full year. From April to October, the figure reached Rs. 5.47 lakh crore or 54.7% of the target. During the first seven months of FY24, total government spending increased by 12% compared to last year, totaling Rs. 23.94 lakh crore.
Tax and non-tax revenues have boosted total receipts
Total receipts from April to October rose 15% YoY to Rs. 15.91 lakh crore, fueled by a 49% surge in non-tax revenue, primarily due to the substantial surplus transferred by the Reserve Bank of India (RBI) in May. Tax revenues also contributed to this growth, with gross tax revenue increasing by 14% and net tax revenue by 11% over the same period. However, divestment remains sluggish at just Rs. 8,000 crore.
Centre is expected to meet its fiscal deficit target
The latest data on government finances indicate that the central government is on track to meet its fiscal deficit target of 5.9% of GDP for FY24. Economic Affairs Secretary Ajay Seth expressed confidence in achieving this target on November 29 and reiterated the government's commitment to reducing the fiscal deficit to 4.5% of GDP by 2025-26. Corporate tax collections are up 17% YoY and income tax collections jumped 31% YoY in the April to October period.
