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Centre's Apr-Sept fiscal deficit widens to Rs 7.02 lakh cr
Fiscal Deficit
Image Credit: Pixabay

Centre's Apr-Sept fiscal deficit widens to Rs 7.02 lakh cr

| @indiablooms | 31 Oct 2023, 09:35 pm

New Delhi: The fiscal deficit increased to Rs 7.02 lakh crore in April-September, up from Rs 6.43 lakh crore in April-August, according to data released on October 31.

This indicates that for the first half of the current financial year, the fiscal deficit accounts for 39.3 percent of the full-year target of Rs 17.87 lakh crore.

For the second consecutive month, the Centre's fiscal deficit was lower compared to the same period last year, standing at Rs 59,035 crore in September, which is a 25 percent decrease year-on-year. The improvement came as a result of sustained growth in tax collections.

In September, the net tax revenue of the Indian government saw a 14.3 percent year-on-year increase, reaching Rs 3.56 lakh crore, as a result of a 26.6 percent surge in corporate tax collections to Rs 2.12 lakh crore and personal income tax collections going up by 15.6 percent to Rs 91,247 crore. Consequently, total receipts in September were 9.3 percent higher.

From April to September, the Centre's total receipts have risen by 17.7 percent, with corporate tax collections experiencing a 20.2 percent increase from the previous year, and income tax collections being 31.1 percent higher.

According to the 2023-24 budget, the anticipated growth in corporate and personal income tax collections for this year, compared to the collections in 2022-23, is projected to be 11.7 percent and 11.4 percent, respectively.

Similar to August, the Centre allocated Rs 72,961 crore to states as tax devolution, bringing the total for the first half of 2023-24 to Rs 4.55 lakh crore, a 21.1 percent increase from the previous year. It's worth noting that transfers to states decrease the Centre's net tax collections.

Interestingly, despite the government having collected more than half (52.2 percent) of its budgeted revenue in the first six months of 2023-24, its expenditure has been less than half of what was initially projected (47.1 percent).

This indicates that the Centre is well on track to meet the fiscal deficit target of 5.9 percent of GDP for this year, although there may be unforeseen expenses due to the national elections in the second quarter of 2024.

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