In the first four months of the 2023-24 financial year, India’s fiscal deficit has surged, surpassing a third of the full-year target. This financial imbalance, measured as the difference between government expenditure and revenue, is a critical indicator of the government’s borrowing needs.
Fiscal Deficit Overview:
- As of the end of July, the fiscal deficit in absolute terms stood at Rs 6.06 lakh crore, according to data from the Controller General of Accounts (CGA).
- This represents a significant increase compared to the same period in the previous financial year, where the deficit was at 20.5% of the Budget Estimates (BE).
Government’s Fiscal Target:
- In the Union Budget for 2023-24, the government aimed to reduce the fiscal deficit to 5.9% of the gross domestic product (GDP).
- In the prior financial year (2022-23), the deficit had reached 6.4% of the GDP, slightly lower than the initial estimate of 6.71%.
- During the April-July period of the current fiscal year, the net tax revenue amounted to Rs 5.83 lakh crore, constituting 25% of the BE.
- This reflects a decrease compared to the same period in the previous year when the net tax revenue collection was 34.4% at the end of July 2022.
- The central government’s total expenditure in the first four months of the financial year reached Rs 13.81 lakh crore, equivalent to 30.7% of the BE.
- In comparison, in the previous year, expenditure had reached 28.6% of the BE during the same period.
- Of the total expenditure, Rs 10.64 lakh crore was allocated to the revenue account, while Rs 3.17 lakh crore was earmarked for the capital account.