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India's fiscal deficit update
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India’s fiscal deficit update: A closer look at the first half of FY24

India's fiscal deficit update

India’s Fiscal Deficit Update: Introduction

India’s fiscal performance in the first half of fiscal year 2023-24 has attracted significant attention, especially as the country looks to manage its fiscal deficit. In this blog post, we will look at the latest fiscal data, examining India’s fiscal deficit, revenue, and expenditure figures to understand the economic outlook as the country aims to achieve its fiscal targets.

India’s fiscal deficit in the first half of FY24

India’s fiscal deficit stood at Rs 7.02 lakh crore, or about $84.35 billion, during the first six months of the current fiscal year starting April 1, according to government data. This figure represents 39.3% of the full-year fiscal deficit estimate.

India’s fiscal deficit update: revenue performance

India’s fiscal deficit update health largely depends on revenue collection. Net tax revenue in April-September reached Rs 11.6 lakh crore, equivalent to 49.8% of the annual estimate. This is a significant improvement compared to the same period last year when it was Rs 10.12 lakh crore. A major highlight in the revenue collection data is the 20% year-on-year increase in corporate tax collections to Rs 4.51 lakh crore.

Government spending

Total government expenditure during the same six-month period was recorded at Rs 21.19 lakh crore, which is 47.1% of the annual target. This figure is much higher than the last financial year when it was Rs 18.24 lakh crore. Government expenditure covers various sectors and initiatives, which contribute to economic growth and development.

India's fiscal deficit update

Increase in capital expenditure

Capital expenditure, especially spending on infrastructure development, saw a substantial increase in H1FY24. The government allocated Rs 4.91 trillion for capital expenditure during this period, which is 49% of the annual target. This marks a significant increase from Rs 3.43 lakh crore allocated during the same period last fiscal. The increased capital expenditure reflects the government’s commitment to building and improving critical infrastructure.

Fiscal deficit target for FY24

India is committed to addressing the challenges of fiscal deficit update and aims to limit it to 5.9% of GDP by the end of the current fiscal year, down from 6.4% recorded in the last fiscal year. Achieving this target is important for fiscal sustainability and economic stability.

India’s Fiscal Deficit Update: Conclusion

India’s fiscal deficit update for the first half of FY24 provides valuable insights into the economic outlook. Despite challenges and uncertainties, the country has made significant progress in revenue collection and capital expenditure. As India strives to achieve its fiscal deficit target, it will require prudent fiscal management, sustained revenue growth, and strategic allocation of resources to ensure a balanced and sustainable fiscal approach. The next few months will be crucial in determining whether India can successfully pursue its fiscal journey and maintain economic stability.

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