With capital expenditure yet to pick up, the Centre’s fiscal deficit remained at a moderate level at Rs 4.35 lakh crore or 27% of the annual target in the first five months of the current financial year compared with 36% in the year-ago period.
While the overall revenue position remained comfortable due to a sharp increase in non-tax revenues, the net tax revenues growth has slowed to 8.7% in April-August due a decline in gross personal income tax receipts in the month of August (Rs 57,798 crore vs. 1.03 lakh crore in year-ago month).
In August 2024, the Centre’s capex fell by 30% on year to Rs 39,727 crore while revenue expenditure rose by 33% to Rs 3.12 lakh crore.
The government’s capex fell by 19.5% to Rs 3 lakh crore in April-August of FY25, partly due to a slowdown in spending in April-May due to general elections. Revenue expenditure rose 4.1% on year to Rs 13.51 lakh crore during the period.
In April-August 2024, the net tax revenues rose by 8.7% on year to Rs 8.74 lakh crore, trailing behind the required rate of 11.8% to meet the annual target.
However, non-tax revenues expanded by 60% boosted by the RBI dividend during the period to Rs 3.34 lakh crore.
The Centre further pared the fiscal deficit target to 4.9% of GDP for FY25 in the full budget presented on July 23 from 5.1% projected in the interim Budget on February 1 as it used extra dividends from the RBI to trim borrowings as well as provide additional funds for development and welfare schemes.
