Fiscal deficit during Apr-May narrows to Rs 50,615 crore

Data shows that net tax revenues in April-May reached Rs 3.19 lakh crore, representing 12% of the annual target. This marks an increase from Rs 2.78 lakh crore during the corresponding period last year.
Fiscal deficit during Apr-May narrows to Rs 50,615 crore

NEW DELHI: India’s fiscal deficit for the initial two months of FY25 decreased to Rs 50,615 crore, equivalent to 3% of the estimated deficit for the entire fiscal year on account of higher dividend from the Reserve Bank of India(RBI), as per data released by the Controller General of Accounts (CAG). Last year, during April-May it stood at Rs 2.1 lakh crore.

In May, the Centre witnessed a fiscal surplus of Rs 1.6 lakh crore owing to the large RBI dividend transfer of Rs 2.1 lakh crore in that month. This brought down the fiscal deficit to Rs 50,000 crore in the first two month of FY25.

Data shows that net tax revenues in April-May reached Rs 3.19 lakh crore, representing 12% of the annual target. This marks an increase from Rs 2.78 lakh crore during the corresponding period last year.

According to the Controller General of Accounts data, there was a surplus of Rs 90,923 crore as revenue receipts surpassed expenditure. The increase in revenue receipts to 19% of the budgeted estimates for April-May FY25, up from nearly 15% in the same period last year, can be attributed to higher tax revenue and the RBI dividend of Rs 2.1 lakh crore approved for last fiscal.

Total expenditure by the government during the period stood at Rs 6.23 lakh crore, or about 13% of the annual target, as against Rs 6.26 lakh crore in the same period of last year. In the Interim Budget, the government had announced a fiscal deficit target of 5.1% of gross domestic product for the current fiscal year, a reduction from the revised 5.6% in the previous year.

“The revenue upside seen from non-tax, and to a smaller extent, tax receipts suggests headroom to both boost expenditure and target a faster fiscal consolidation than what was pencilled in to the Interim Budget for FY2025,” Nayar said.

ICRA expects nominal gross domestic product to rise by 10.8% in FY2025, only slightly lower than the imputed growth of 11.0% in the Interim Budget over the provisional estimates for FY2024.

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