India’s April-June fiscal deficit at 8.1% of 2024/25 target
7:22 am Wednesday, July 31st, 2024
NEW DELHI (Reuters) -India’s fiscal deficit for the first quarter of the financial year that started in April was 1.36 trillion rupees ($16.25 billion), or 8.1% of the estimate for the whole year, government data showed on Wednesday.
Net tax receipts in April-June were 5.5 trillion rupees, or 21% of the annual target, compared with 4.34 trillion rupees in the same period last year, according to the data.
Total government expenditure during the period was 9.7 trillion rupees, or about 20.4% of the annual goal, lower than the 10.51 trillion rupees in the same period last year.
Government spending in the first three months of the current financial year was subdued due to general elections.
For the three months, the government’s capital expenditure or spending on building physical infrastructure was 1.81 trillion rupees, or 16.3% of the annual target, against 2.78 trillion rupees in the same period a year earlier.
The Indian government last week lowered its fiscal deficit target to 4.9% of GDP for the financial year from 5.1% in the interim budget in February, on the back of a surplus transfer from the central bank and robust tax revenues.
The target was lowered despite higher allocation in the federal budget for job creation and regions run by key allies in Prime Minister Narendra Modi’s recently formed coalition government.
The country’s budget gap stood at 5.6% of GDP last fiscal year.
India will move away from setting fiscal deficit targets after the financial year 2026 and instead will use the government debt-to-GDP ratio as the anchor for fiscal policy.
($1 = 83.6810 Indian rupees)
(Reporting by Sarita Chaganti Singh and Nikunj Ohri; Editing by Savio D’Souza and Eileen Soreng)
