NEW DELHI: The central government’s fiscal deficit in the first half of 2023-24 has touched 39.3% of the full-year target of Rs 17.87 lakh crore compared to 37.3% of the budgeted target a year ago. The fiscal deficit by the end of September 2023 was Rs 7.02 lakh crore as compared to Rs 6.2 lakh crore a year ago. The government has set a fiscal deficit target of 5.9% of the Gross Domestic product (GDP) in the current financial year, 50 basis points lower than 6.4% in the previous year.
Capital expenditure (capex) of the government rose 43% year-on-year (YoY) in the first half of the current financial year to Rs 4.90 lakh crore, which is 49% of the full-year target of Rs 10 lakh crore. The capital expenditure in September 2023 rose 105% to Rs 1.16 lakh crore compared to Rs 57,000 crore in August 2023. Capex grew 29% in September YoY. Capex is the money spent by the government for creating infrastructure and other assets.
The government has managed to keep its revenue expenditure – expenses on salaries, pension and other admin costs – in control as it rose by 10% YoY to Rs 16.3 lakh crore in the first half of the current financial year as compared to Rs 14.8 lakh crore in the year-ago period. The total expenditure in the first half of the financial year was Rs 21.2 lakh crore, 47.1% of the full-year target of Rs 45 lakh crore.
Net tax collection (after devolving the states’ shares) rose 14.66% YoY to Rs 11.60 lakh crore in the first half of 2023-24 as against Rs 10.11 lakh crore in the year-ago period. The gross tax collection rose Rs 16.2 lakh crore, showing a 16.34% jump over the year-ago period. The gross tax collections in the April-September period were boosted by a 31% YoY jump in income tax, 20% jump in corporate taxes and 16.6% jump in Central GST collections. The gross tax collection in September was a 46% jump over the previous month, primarily because of the advance tax payment deadline.
“First half of FY24 gross tax collection has remained strong at 16.3% YoY despite slowdown in nominal Gross Domestic product growth, indicating that tax collection buoyancy has improved. Based on the tax collection trends in the first half of the financial year, direct tax collection is expected to be at Budget Estimate. Marginal shortfall is expected in indirect tax collection,” says Gaura Sengupta, India economist, IDFC First Bank.
She said the nominal Gross Domestic productgrowth is expected to undershoot budgeted growth of 10.8%, due to softer growth in GDP deflator, hence while we expect the fiscal deficit target to be met, some expenditure moderation will be needed (versus budget estimate).
Core sector growth slows to 8.1% in Sept
NEW DELHI: Eight key infrastructure sectors’ growth slowed down to a 4-month low of 8.1% in September 2023 as against 8.3% a year ago, as per the official data released on Tuesday. The growth rate in the output of refinery products, fertiliser, cement and electricity during the month under review fell, while it was negative in the case of crude oil. The previous low was in May, when the growth rate of these sectors stood at 5.2%. ENS
