The central government’s fiscal deficit for April-May 2024 was Rs 50,615 crore, accounting for 3% of the estimated number for the ongoing fiscal year, as per the data released by CGA.
Net tax revenues for April-May stood at Rs 3.19 lakh crore, or 12% of the annual target, compared to Rs 2.78 lakh crore during the same period last year. This year’s figure reflects a slight increase from the 11.8% of budget estimates recorded in April-May 2023.
The positive sentiment around the fiscal deficit, the gap between the government’s revenue and expenditure, is largely attributed to increased tax revenues. Revenue receipts reached 19% of the FY25 target, up from 15% in the same period of the previous fiscal year.
During these two months, the government’s capital expenditure, or spending on building physical infrastructure, was Rs 1.44 trillion, or 13% of the annual target. This is lower than the Rs 1.68 trillion spent in the same period a year earlier.
According to the budget estimates from February’s Interim Budget, the government aims to reduce the fiscal deficit to 5.1% for FY25 and further to 4.5% for FY26. The Controller General of Accounts (CGA) data shows a surplus of Rs 90,923 crore.
The interim budget revised the fiscal deficit for FY24 from the initial 5.9% to 5.8%.
Rating agency S&P is closely monitoring India’s fiscal consolidation plans and has indicated it may raise the country’s ratings if the fiscal deficit narrows significantly, bringing the general government debt below 7% of GDP on a structural basis.
