Fiscal deficit until Dec at 55% of annual target

The Indian central government's fiscal deficit reached 50.7% of the annual target in the first eight months of this fiscal year, compared to 58.9% a year before. The deficit dropped below the level a year earlier, reaching ₹9.07 lakh crore between April and November. The fiscal gap narrowed to ₹1.03 lakh crore in November, thanks to lower tax devolution to states, a contraction in revenue spending, and only a marginal increase in capital expenditure.

In the first half of the fiscal year, the fiscal deficit of the Indian government has reached 39.3% of the annual target, compared to 37.3% during the same period in the previous year, according to official data released on Tuesday. However, the fiscal deficit has been kept under control after experiencing an initial spike until July.

In absolute terms, the fiscal deficit touched Rs 6.43 lakh crore between April and August, compared with Rs 5.42 lakh crore a year earlier. Until July, the Centres fiscal deficit had touched 33.9% of the annual target, sharply higher than 20.5% a year earlier.

India's fiscal deficit for the first five months of the current fiscal year, ending in August, reached 6.43 lakh crore rupees, equivalent to 36% of the annual estimates, according to government data. This represents an increase from the 32.6% deficit reported during the same period the previous year.

The central government contained its fiscal deficit in the 2023-24 financial year at 63.6% of the revised target despite a moderation in nominal GDP growth. The deficit dropped 7.3% from a year ago period to ₹11.03 lakh crore. Revenue spending moderated while capital spending remained lower than the revised target.

The capital expenditure by central public sector enterprises has already crossed 52% of their budget expenditure for the current financial year.

In the Union Budget, the government aimed to further bring down the fiscal deficit -- a key indicator of borrowing -- during the current financial year 2023-24 to 5.9 per cent of the gross domestic product

While announcing the federal budget for this fiscal year, Finance Minister Nirmala Sitharaman said India aims to narrow the fiscal gap to 5.9% of gross domestic product from 6.4% in the last financial year.

India's fiscal deficit for the last financial year ending March 31 met New Delhi's target and narrowed to 6.4% from the previous year, thanks to strong tax receipts and lower payments. The government expects the deficit to further reduce to 5.9% next year and aims to bring it under 4.5% of GDP by 2025-26.