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India’s Fiscal Deficit Reaches 45% of FY24 Target in 7 Months

In the first seven months of the financial year 2023-24, India’s fiscal deficit has reached a significant milestone, standing at 45% of the annual target of Rs 17.87 trillion. This analysis delves into the key figures and trends shaping the country’s fiscal health.

I. Fiscal Deficit Overview

During the period from April to October, the fiscal deficit amounted to Rs 8.04 trillion, reflecting a notable increase from Rs 7.57 trillion in the corresponding timeframe of the previous fiscal year.

II. Target Comparison

The current fiscal deficit of 45% closely aligns with the same period last year, where the deficit was 45.6% of the budget estimates for 2022-23. The government’s fiscal planning remains pivotal in managing economic stability.

III. Fiscal Deficit Definition

The fiscal deficit, representing the disparity between the government’s expenditure and revenue, serves as a critical metric in assessing economic management and policy effectiveness.

IV. Half-Year Progress

By the end of October, the fiscal deficit had reached 39.3% of the full-year target, indicating a dynamic fiscal landscape. This interim assessment provides insights into the trajectory for the remaining months.

V. Government Projections

In the Union Budget, the government outlined its commitment to reducing the fiscal deficit to 5.9% of the gross domestic product (GDP) for the 2023-24 financial year. This target signifies a strategic move towards fiscal prudence.

VI. Previous Fiscal Performance

In the preceding fiscal year (2022-23), the fiscal deficit stood at 6.4% of the GDP, surpassing the earlier estimate of 6.71%. Understanding past trends provides a context for evaluating current fiscal decisions.

VII. Revenue and Expenditure Trends

Latest estimates reveal a revenue gap of Rs 2.8 trillion, a decrease from Rs 3.85 trillion in the same period last year. Concurrently, government spending surged to Rs 23.94 trillion, emphasizing the dynamic nature of fiscal dynamics.

VIII. Confidence Amid Challenges

Economic Affairs Secretary Ajay Seth expressed confidence in the government’s ability to meet the fiscal deficit target for FY24, despite challenges posed by a rising food subsidy bill. This assurance underscores ongoing efforts to balance fiscal priorities.

Questions Related to Exams

Q: What is India’s fiscal deficit for the period between April and October in the current fiscal year (FY24)?

A: India’s fiscal deficit for the mentioned period in FY24 is reported at Rs 8.04 trillion, representing 45% of the Centre’s targeted fiscal deficit of Rs 17.87 trillion for the entire financial year.

Q: How does this fiscal deficit compare to the corresponding period in the previous fiscal year (FY23)?

A: In the same timeframe last year (FY23), the fiscal deficit was slightly higher at 45.6% of the budget estimates for 2022-23.

Q: What is the government’s target for fiscal deficit as a percentage of Gross Domestic Product (GDP) for the 2023-24 financial year?

A: The government aims to bring down the fiscal deficit to 5.9% of the GDP in the 2023-24 financial year, as outlined in the Union Budget.

Q: What were the initial and actual fiscal deficit percentages of GDP for the preceding fiscal year (2022-23)?

A: The initial estimate for the fiscal deficit as a percentage of GDP in 2022-23 was 6.71%, while the actual figure reported was 6.4%.

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