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Centre’s Fiscal Deficit for April-July Reaches 33.9% of FY24 Target

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:

Centre's fiscal deficit up to July widens to almost 34% of FY24 target - The Economic Times

  • 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%.

Revenue Collection:

  • 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.

Government Expenditure:

  • 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.

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