The Indian government’s fiscal deficit has reached ₹6 trillion, equivalent to a third of the ₹17.9 trillion estimated in the Union budget for the fiscal year 2023-24 (FY24), according to data released by the Comptroller General of Accounts (CGA). This deficit, representing the gap between government spending and revenue met through borrowings, stood at 33.9% of the full-year target, thanks to robust tax and non-tax revenue receipts. The surge in revenue has been a key factor contributing to this positive fiscal situation.
During the first four months of the current fiscal year, overall revenue receipts reached ₹7.6 trillion, constituting 29% of the full-year target. The central government’s revenue deficit, which measures the difference between revenue receipts and revenue spending, reached ₹3 trillion by the end of July, accounting for 35% of the full-year target.
In the same period up to July, the central government collected ₹5.8 trillion in tax revenue, which represents a quarter of the ₹23.3 trillion full-year target. While corporate tax collections were slightly lower than the previous year, standing at ₹1.76 trillion, personal income tax collections and central goods and services tax (CGST) collections exceeded the amounts collected from these sources in the same period a year ago, reaching ₹2.57 trillion and ₹2.73 trillion, respectively. However, union excise duty collection in the first four months of the current fiscal was lower than the previous year, amounting to ₹76,200 crore.
Among non-tax revenue receipts, a noteworthy highlight is the significant improvement in profits and dividends received by the central government. By the end of July, receipts from dividends and profits exceeded ₹1 trillion, surpassing the full-year budgeted target of ₹91,000 crores. Furthermore, the Centre collected ₹5,465 crores from disinvestment up to July’s end, against the full-year target of ₹51,000 crores.
Another significant development is the transfer of ₹3 trillion to state governments by the end of July as part of the devolution of taxes. This transfer represents a ₹1 trillion increase compared to the amount transferred in the same period a year ago, indicating higher financial support to state governments from the central government.
The substantial revenue receipts and improved fiscal metrics provide a positive outlook for India’s fiscal health in the current fiscal year. The government’s ability to manage the fiscal deficit and strengthen revenue streams will be closely watched as the fiscal year progresses, with an eye on achieving the full-year budget targets and sustaining the momentum in economic recovery.