The central government's fiscal deficit widened to Rs 8.04 lakh crore in April-October from Rs 7.02 lakh crore in April-September, data released by the Controller General of Accounts on November 30 showed. At Rs 8.04 lakh crore, the fiscal deficit for the first seven months of the current financial year accounts for 45.0 percent of the full-year target of Rs 17.87 lakh crore.
The fiscal deficit in April-October 2022 was 45.6 percent of the target for 2022-23.
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For the third month in a row, the Centre's fiscal deficit was lower compared to the year-ago period, coming in at Rs 1.02 lakh crore in October, down 26 percent year-on-year (YoY). However, the fall in the fiscal deficit was due to the Centre's expenditure contracting more than its income.
In October, the Union government's total expenditure was down 14 percent YoY at Rs 2.75 lakh crore, with capital expenditure down 15 percent at Rs 56,296 crore. However, the Centre remains on track to meet its full-year record capex target of Rs 10 lakh crore, with the figure for April-October standing at Rs 5.47 lakh crore, or 54.7 percent of the target.
For the first seven months of 2023-24, the government's total spending stood at Rs 23.94 lakh crore, 12 percent higher than the same period last year. Total receipts, meanwhile, were up 15 percent YoY in April-October at Rs 15.91 lakh crore, propelled by a 49 percent increase in non-tax revenue - thanks to the huge surplus transferred by the Reserve Bank of India (RBI) in May.
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On the tax front, the Centre's gross tax revenue in April-October recorded a growth of 14 percent, while net tax revenue was up 11 percent over the same period. Divestment, however, continues to lag, at just Rs 8,000 crore.
The upward trend in tax collections, especially corporate tax collections, was broken in October as they were down 13 percent YoY at Rs 30,686 crore. Income tax collections, though, continued to shoot up, rising 31 percent to Rs 69,583 crore. On the whole, gross tax collections in October was down 1 percent YoY while net tax revenue was 11 percent lower.
Transfers to states reduce the Centre's net tax collections. Like in September, the Centre transferred Rs 72,961 crore to states as tax devolution, taking the total for the first seven months of 2023-24 to Rs 5.28 lakh crore, 22 percent higher YoY.
For April-October, growth in corporate and income tax collections was 17 percent and 31 percent, respectively. As per the 2023-24 budget, the growth in corporate and personal income tax collections forecast this year from what was collected in 2022-23 is 11.7 percent and 11.4 percent, respectively.
The latest figures on the government's finances continue to suggest that the Centre will meet its fiscal deficit target of 5.9 percent of GDP for 2023-24, with Economic Affairs Secretary Ajay Seth expressing confidence about the same on November 29. Seth also affirmed the government's commitment to reducing the fiscal deficit to 4.5 percent of GDP by 2025-26.
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