Centre's fiscal deficit narrows to 17.2% of FY25 target till July
fiscal deficit in the first four months of this financial year hit 17.2% of the annual target, against 33.9% a year before, as revenue mop-up soared while expenditure contracted.
The performance keeps the government firmly on course to meet its renewed target of containing fiscal deficit at 4.9% of gross domestic product (GDP) in 2024-25, said experts.
The Centre aims to reduce the gap further to less than 4.5% of GDP in 2025-26.
In absolute terms, the fiscal gap in the April-July period amounted to ₹2.77 lakh crore, less than half of ₹6.06 lakh crore a year before.
Revenue expenditure during this period moderated 2.3% from a year earlier to ₹10.39 lakh crore. Despite doubling in July from a year before, capital spending in the first four months of this fiscal fell 17.6% to ₹2.61 lakh crore, reflecting the impact of elections on project planning and execution.
Total non-debt receipts till July surged 33.6% year-on-year to ₹10.17 lakh crore, way above the targeted full-year increase of 10.4%, owing to better-than-expected tax and non-tax revenue.
Net tax receipts between April and July increased 22.8% year-on-year, more than double the annual target, to touch ₹7.15 lakh crore. Non-tax revenue mop-up, boosted by a record Reserve Bank of India dividend windfall of ₹2.11 lakh crore, surged 68.8% to ₹3.02 lakh crore. «The outlook for revenue receipts seems fairly favourable, while there may be a miss on capex and disinvestment targets,» said ICRA chief economist Aditi Nayar. «Nevertheless, expenditure savings
