New Delhi: India’s fiscal deficit for the first seven months (April-October) of the current financial year came in at Rs 8.25 lakh crore, which worked out to 52.6 per cent of the annual budget estimate, according to figures released by the Finance Ministry on Friday.
The government’s total receipts crossed Rs 18 lakh crore during this period, constituting 51.5 per cent of the budget estimate for 2025-26, while overall expenditure in April to October was at Rs 26.25 lakh crore at 51.8 per cent of the budget target.
Revenue receipts stood at Rs 17.63 lakh crore, of which tax revenue was Rs 12.74 lakh crore and non-tax revenue came in at Rs 4.89 lakh crore. Tax revenue for April to October rose from Rs 13.04 lakh crore during the corresponding period the previous year.
Non-tax revenue recorded a sharp increase as the Reserve Bank of India approved a dividend of Rs 2.69 lakh crore to the Central government, compared with Rs 2.11 lakh crore transferred last year. This higher dividend will enable the Central government to reduce the fiscal deficit.
Revenue deficit was at Rs 2.44 lakh crore or 46.7 per cent of the financial year’s budget target as the income tax burden on the middle class was reduced in the budget for the current financial year. The move has also placed more disposable income in the hands of consumers, which is expected to increase aggregate demand in the economy and spur growth.
On the expenditure side, the Central government spent about Rs 2.46 lakh crore on major subsidies such as food, fertilisers and petroleum. This was 64 per cent of the revised annual target.
Finance Minister Nirmala Sitharaman set the fiscal deficit target in the budget for 2025-26 at 4.4 per cent of GDP, as part of the government’s commitment to follow a descending glide path on the deficit to strengthen the country’s fiscal position. India’s fiscal deficit for 2024-25 stood at 4.8 per cent of GDP as part of the revised estimate.
A decline in the fiscal deficit strengthens the fundamentals of the economy and paves the way for growth with price stability. It leads to a reduction in borrowing by the government, thus leaving more funds in the banking sector for lending to corporates and consumers, which leads to higher economic growth.
(IANS)
