India’s fiscal deficit falls to 29.4 pc. of the target for FY 25 in April-September, ETCFO

India economy



In New Delhi, India’s fiscal deficit for April-September stood at Rs 4.75 lakh crore, or about 29.4 per cent of estimate, for the current fiscal (FY25), government data showed on Wednesday.

According to the data, net tax revenue for the first six months of the current fiscal stood at Rs 12.65 lakh crore, or 49 per cent of the annual target, compared to Rs 11.6 lakh crore for the same period last year.

The gap between expenditure and revenue during the first six months of the current fiscal stood at Rs 4.75 lakh crore out of the total limit set at Rs 16.85 lakh crore for the current fiscal, according to provisional data released by the Controller General of Accounts. CGA).

The government had set a budget deficit target of 4.9 percent of GDP for the fiscal year ending March 2025 as it aims to continue its fiscal consolidation path.

According to Aditi Nayar, chief economist and head at ICRA, the fiscal deficit has come down to Rs 4.7 lakh crore or 29 per cent of the FY2025 BE in H1 FY2025, compared to Rs 7 lakh crore in April-September FY2024, helped by the dividend payment from the RBI. both in the first part of the fiscal year and in the continued contraction of capital expenditure on an annual basis.

“In the first half of FY2025, net tax revenues rose 9 percent year-on-year, non-tax revenues rose 51 percent, boosted by the RBI dividend, and revenue expenditure rose a modest 4 percent, while capital expenditure declined at an unpleasant fell 15 percent. cents,” she noted.

Overall, capital investment rose 10.3 percent year-on-year in the second quarter of FY25, which should support economic growth in the quarter. ICRA believes that income tax revenues may surpass RBE of Rs 11.5 lakh crore for FY 2025 unless large refunds are released in the latter part of the fiscal, while corporate tax inflows may be in line or slightly lower than objective. Non-tax revenues reached Rs 3.57 lakh crore in September, accounting for 65.5 per cent of the Union Budget estimate of Rs 5.45 lakh crore for FY 2025.

The budget deficit was supported by the central bank’s dividend payment earlier this year and a cut in capital expenditure. The RBI paid Rs 2.1 lakh crore as dividend to the central government for the financial year 2024. According to the data, capital expenditure during April-September period reached Rs 4.14 lakh crore, which is 37.3 percent of the target for all year round. a decrease from the 49 percent achieved in the first half of the previous financial year.

–IANS

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  • Published on Oct 31, 2024 08:56 IST

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