Centre’s fiscal deficit at 17.2% of FY25 target in April-July: Govt data

Tribune News service

Chandigarh, August 30

The Centre’s fiscal deficit at the end of the first four months (April-July 2024) of the current fiscal touched 17.2 per cent of the full-year target. In absolute terms, the fiscal deficit for the period touched Rs 2.77 lakh crore, according to government data.

A fiscal deficit is the difference between the total expenditure and revenue of the government. It is an indication of the total borrowing that is needed by the government.

The Centre pared the fiscal deficit target to 4.9 per cent of GDP for FY25 in the full budget presented on July 23 from 5.1 per cent projected in the interim Budget on February 1 as it used extra dividends from the RBI to trim borrowings as well as provide additional funds for development and welfare schemes.

The dividend of Rs 2.11 lakh crore from the RBI as against the budget estimate of Rs 80,000-90,000 crore, has given an extra fiscal space of 0.4 per cent of GDP to the Centre to calibrate fiscal deficit reduction and provide for additional spending. In the last fiscal year, the fiscal deficit was 5.6 per cent of the GDP.

Overall, the Cental Government has received Rs 10.23 lakh crore as a total tax receipt. Out of the total, Rs 3.67 lakh crore has been transferred to state Governments as devolution of share of taxes.

According to the data, the net tax receipts for the period (April-July) were Rs 7.15 lakh crore or 27.7 per cent of the budget estimates for the current fiscal compared with Rs 5.83 lakh crore for the same period last year, according to the data.

The Central Government’s total expenditure during the period was Rs 13 lakh crore or about 27% of the annual goal, lower than the Rs 13.81 lakh crore in the same period last year.

For the first four months, the government’s capital expenditure or spending on building physical infrastructure was Rs 2.61 lakh crore while Rs 10.39 lakh crore was in the revenue account. Further, out of the total revenue expenditure, Rs 3.28 lakh crore was towards interest payments and Rs 1.26 lakh crore was on account of major subsidies.