Fiscal Tightrope: India’s Half-Year Deficit Hits 39% Target
The central government’s fiscal deficit for the first half of the current financial year reached 39.3 percent of the full-year target, slightly higher than the previous year’s 37.3 percent. In actual terms, the fiscal deficit, which represents the gap between expenditure and revenue, amounted to ₹7.02 lakh crore by the end of September, as per data released by the Controller General of Accounts (CGA).
In the Union Budget, the government aimed to reduce the fiscal deficit to 5.9 percent of the Gross Domestic Product (GDP) for the 2023-24 financial year, compared to 6.4 percent of GDP in 2022-23 (revised down from the initial estimate of 6.71 percent).
Tax revenue reached ₹11.60 lakh crore, equivalent to 49.8 percent of the annual target. From April to September 2022-23, the net tax collection amounted to 52.3 percent of the year’s Budget Estimate (BE).
The central government’s total expenditure was ₹21.19 lakh crore, which is 47.1 percent of the BE for 2023-24, slightly higher than the 46.2 percent of BE for 2022-23. The Government of India transferred ₹4,55,444 crore to state governments as their share of taxes until September, an increase of ₹79,338 crore compared to the previous year.
Of the total revenue expenditure, ₹4.84 lakh crore was attributed to interest payments, and ₹2.06 lakh crore was allocated for major subsidies. ICRA Chief Economist Aditi Nayar commented that a higher-than-budgeted dividend surplus transfer of ₹8,742 crore from the RBI could provide some cushion to address potential shortfalls in other revenue sources, like disinvestment, or potential overruns in expenses relative to their respective BEs, such as MGNREGA and LPG subsidies.
