India's fiscal deficit for April-July at Rs 4.55 lakh crore, narrows to 26.8% of FY27 aim

India's fiscal deficit for the April-July period was Rs 4.55 lakh crore, representing 26.8% of the annual budget target, according to government data released today. This is a significant improvement from the 29.9% reported in the same period last year. The total government receipts amounted to Rs 13.05 lakh crore, while the total expenditure was Rs 17.62 lakh crore, both figures indicating an expansion compared to the previous year.

Total receipts in the April-July 2023 period were 35.8% of the budget target, whereas expenditure accounted for 32.9% of the target.

The revenue receipts for the period were Rs 12.68 lakh crore, with tax revenue contributing Rs 8.45 lakh crore and non-tax revenue adding Rs 4.23 lakh crore. Notably, non-tax revenue saw a substantial increase due to the Reserve Bank of India's decision to transfer a dividend of Rs 2.87 lakh crore to the central government, up from Rs 2.69 lakh crore in the previous year.

This boost in non-tax revenue will aid the government in reducing its fiscal deficit. The revenue deficit stood at Rs 43,645 crore, or 7.4% of the fiscal year's budget target.

Finance Minister Nirmala Sitharaman announced a fiscal deficit target of 4.3% of GDP for the financial year 2027, in line with the government's commitment to fiscal consolidation and keeping the budget gap under control during the presentation of the Union Budget. On the expenditure side, the central government allocated Rs 1.54 lakh crore for major subsidies such as food, fertilizers, and petroleum, which constituted 37% of the annual aim.

This expenditure was higher than the 30% of the budgeted expenditure in the comparable period of the previous year.