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India’s Fiscal Update: 2023-24 Deficit and Revenue Surge

India’s fiscal deficit for the fiscal year ending March 2024 is anticipated to outperform government projections, coming in slightly better than the estimated 17.35 trillion rupees ($207.81 billion). This optimistic outlook is attributed to increased tax receipts and bolstered non-tax revenues, according to a government source speaking anonymously in New Delhi. The official announcement regarding the 2023/24 fiscal deficit is slated for May 31st.

Revenue Boost

Income tax receipts in India surged by 17.7% year-on-year, reaching nearly $235 billion in the fiscal year 2023/24. This figure exceeds the government’s initial projection, indicating a robust revenue performance for the period under review.

Targeted Fiscal Deficit

The government is aiming for a fiscal deficit equivalent to 5.8% of GDP for the 2023/24 financial year. However, it remains unspecified whether the fiscal deficit as a percentage of GDP will also surpass the targeted figure.

Unaffected Spending Amid Elections

Despite ongoing elections, India’s spending plans for April-June remain unaffected, as confirmed by the government source. However, specifics regarding the impact on spending were not disclosed.

Potential Securities Buyback

Following the acceptance of offers to buy back government bonds worth 105.10 billion rupees at a recent auction, the government is considering the necessity of another round of buying back government securities. This deliberation comes after the central bank’s acceptance fell short of the notified amount of 400 billion rupees.

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