Fiscal deficit for Q1 at 25% of yearly target
NEW DELHI : The government’s fiscal deficit in the first quarter of the current fiscal (FY24) widened to ₹4.51 trillion, or 25.3% of annual estimates, according to official data released on Monday. The fiscal deficit reported during the quarter ending on 30 June widened from 21.2% reported during the year-ago period.
This was largely due to a sharp jump in capital expenditure and accelerated tax devolution to state governments, offsetting an increase in non-tax revenue, analysts said. Capex rose to ₹2.78 trillion during the quarter, up from ₹1.75 trillion during the same period of the previous year.
Total receipts during April-June of FY23 stood at ₹5.99 trillion, or 22.1% of annual estimates, of which tax receipts stood at ₹4.3 trillion, or 18.6% of annual estimates. By comparison, total expenditure in the same quarter of FY24 rose to ₹10.5 trillion, or 23.3% of the annual estimates from ₹9.48 trillion a year ago.
The Centre aims to bring down the fiscal deficit—the difference between the government’s income and spending—to 5.9% of gross domestic product during financial year 2024. Aditi Nayar, chief economist and head of research and outreach at rating agency ICRA, put down the widening deficit to “a surge in capex and accelerated tax devolution to the state governments, offsetting the sharp jump in non-tax revenue." Nayar said the government had in July this year released an additional ₹729 billion as tax devolution, bringing the aggregate amount for this fiscal so far to ₹3.1 trillion, 54% higher than in April-July FY2023, and about 30% of the FY2024 budget estimates.
Read more on livemint.com
