India's fiscal deficit widens in April-August despite surge in tax collections

The government's fiscal deficit widened to Rs 6.43 lakh crore for the first five months (April-August) of the current financial year which works out to 36 per cent of the target of Rs 17.87 lakh crore fixed in the budget for the entire year, figures released by the Controller General of Accounts on Friday showed.

The fiscal deficit for April-August last year was Rs 5.42 lakh crore which was 32.6 per cent of the target of Rs 16.61 lakh crore for 2022-23.

The increase in the deficit was largely due to a sharp jump in capital expenditure on big ticket infrastructure such as highways and railway projects in the run-up to key assembly elections in some states which will be followed by the Lok Sabha polls early next year, according to analysts.

The increase in the fiscal deficit, which is the gap between the government’s expenditure and revenue, has taken place despite the surge in tax collections compared to last year.

The Centre aims to bring down fiscal deficit to 5.9 per cent of gross domestic product during 2023-2024.

Capital expenditure (capex) rose to Rs 3.74 lakh crore during April-August from Rs 2.52 lakh crore in the same period a year ago.

Total receipts during April-August stood at Rs 10.29 lakh crore or 37.9 per cent of annual estimates.

Corporate tax collections rose over 15 per cent year-on-year to Rs 2.39 lakh crore during the period under review, the data showed.