India’s fiscal deficit in April-August period stands at Rs 4.35 lakh crore, narrows to 27% of full-year target

India's fiscal deficit for April-August of this financial year stood at Rs 4.35 lakh crore or 27 percent of the annual estimate, data released on September 30 showed. The fiscal deficit narrowed from 36 percent reported during the same period in last year. 

Total receipts stood at Rs 12.17 lakh crore while overall expenditure in April to August stood at Rs 16.52 lakh crore, or about 34 percent of the annual goal, lower than the Rs 16.72 lakh crore in the same period last year. 

Net tax receipts for the period were recorded at Rs 8.74 lakh crore, or 34 percent of the annual target, compared to Rs 8.04 lakh crore for the same period last year, according to data released by the Controller General of Accounts (CGA). 

The government keeping to its market borrowing target is also likely to help contain fiscal deficit, besides the surprisingly higher dividend from the Reserve Bank of India. The government is expecting to rake up Rs 6.61 lakh crore from borrowing in line with the Budget, in the second half of the year. 

For the first five months, the government’s capital expenditure or spending on building physical infrastructure was Rs 3.01 lakh crore, or 27 percent of the annual target, against Rs 3.74 lakh crore for the same period a year earlier. 

In her Union Budget 2024 speech Finance Minister Nirmala Sitharaman revised the fiscal gap target down to 4.9 percent below the 5.1 percent budget gap suggested in the Interim Budget. The finance minister also pegged the fiscal deficit target at 5.1 percent for the next fiscal year. 

In the Budget, the government also stuck to its fiscal consolidation roadmap even though its coalition partners demanded more funds from the Modi 3.0 government and the middle class was expecting significant tax relief measures ahead of the assembly elections in some crucial states. 

Fiscal deficit is the difference between the total expenditure and revenue of the government. It is an indication of the total borrowing that is needed by the government.