The central government, aiming to reduce fiscal deficit to under 4.5% of GDP by 2025-26, faces a widened fiscal deficit of Rs 9.07 lakh crore for April-November, accounting for 50.7% of the full-year target of Rs 17.87 lakh crore.
In a positive trend, November’s monthly fiscal deficit of Rs 1.03 lakh crore reflects a 53% YoY reduction, driven by increased receipts and a contraction in government expenditure.
Despite the monthly improvement, the Centre lags behind in achieving its ambitious full-year capital expenditure (capex) target of Rs 10 lakh crore, with April-November figures at Rs 5.86 lakh crore.
The government’s total spending for the first eight months of 2023-24 stood at Rs 26.52 lakh crore, a 9% YoY increase. Total receipts saw a 19% YoY rise at Rs 17.46 lakh crore, fueled by a significant surplus transferred by the Reserve Bank of India in May.
Notably, the Centre’s non-tax revenue in April-November, at Rs 2.84 lakh crore, has nearly matched the entire collection for 2022-23.
The surge in net tax revenue in November, growing by 149%, was attributed to increased transfers to states in November 2022. Corporate tax collections saw an 84% YoY growth, while personal income tax collections rose by 13%.
As the government eyes a fiscal deficit target of 5.9% of GDP for 2023-24, the upcoming budget for 2024-25 is anticipated to outline a substantial reduction in fiscal deficit on the path to achieving the 4.5% of GDP target for 2025-26.
