The performance keeps the government firmly on course to meet its renewed target of containing fiscal deficit at 4.9% of gross domestic product (GDP) in 2024-25, said experts.
The Centre aims to reduce the gap further to less than 4.5% of GDP in 2025-26.
In absolute terms, the fiscal gap in the April-July period amounted to ₹2.77 lakh crore, less than half of ₹6.06 lakh crore a year before.
Revenue expenditure during this period moderated 2.3% from a year earlier to ₹10.39 lakh crore. Despite doubling in July from a year before, capital spending in the first four months of this fiscal fell 17.6% to ₹2.61 lakh crore, reflecting the impact of elections on project planning and execution.
Total non-debt receipts till July surged 33.6% year-on-year to ₹10.17 lakh crore, way above the targeted full-year increase of 10.4%, owing to better-than-expected tax and non-tax revenue.Net tax receipts between April and July increased 22.8% year-on-year, more than double the annual target, to touch ₹7.15 lakh crore. Non-tax revenue mop-up, boosted by a record Reserve Bank of India dividend windfall of ₹2.11 lakh crore, surged 68.8% to ₹3.02 lakh crore. “The outlook for revenue receipts seems fairly favourable, while there may be a miss on capex and disinvestment targets,” said ICRA chief economist Aditi Nayar. “Nevertheless, expenditure savings typically accumulated by ministries every year are likely to provide additional cushion to offset shortfall from other heads, if needed,” Nayar said, forecasting that the fiscal deficit target for 2024-25 would be realised.July deficit shrinks
The data showed that the fiscal gap in July alone declined 8.4% from a year earlier to ₹1.41 lakh crore, as a surge in capital expenditure was more than offset by a moderation in revenue spending. Capital expenditure more than doubled to ₹80,209 crore from ₹38,599 crore.
Content Source: economictimes.indiatimes.com