India’s fiscal deficit during April-June 2024 stood at Rs 1.36 lakh crore, or 8.1 per cent of the full budget target for FY25, according to the latest official data released on July 31. The fiscal deficit is the gap between expenditure and revenue.
The fiscal deficit had stood at 25.3 per cent in the corresponding period last year.
According to the data released by the Controller General of Accounts, net tax receipts in April-June 2024 stood at Rs 5.5 lakh crore, or 21 per cent of the annual target, compared with Rs 4.34 lakh crore in the year-ago period, according to the data.
Total government expenditure during the period was Rs 9.7 lakh crore, or about 20.4 per cent of the annual goal, lower than the Rs 10.51 lakh crore in the same period last year.
On Wednesday, Union Finance Minister Nirmala Sitharaman while speaking in the Rajya Sabha as part of her reply to the debate on the Budget said the government is on track to achieve the target of 4.5 per cent fiscal deficit by 2025-26.
“The government has always maintained fiscal prudence as one of the important governance principles. From the low levels of GDP during the Covid-19 pandemic, India has become the fastest-growing economy,” she also said.
Government spending in the first three months of the current financial year was subdued due to general elections.
For the three months, the government’s capital expenditure or spending on building physical infrastructure was Rs 1.81 lakh crore, or 16.3 per cent of the annual target, against Rs 2.78 lakh crore in the same period a year earlier.
In the latest Budget 2024-25 presented on July 23, the central government lowered its fiscal deficit target to 4.9% of GDP for the financial year, as compared with 5.1% in the interim budget in February, on the back of a surplus transfer from the central bank and robust tax revenues.
The country’s budget gap stood at 5.6 per cent of GDP last fiscal year.
India will move away from setting fiscal deficit targets after the financial year 2026 and instead will use the government debt-to-GDP ratio as the anchor for fiscal policy.
