NewKerala.com

India's Fiscal Deficit Hits 52.6% Amid RBI's Record Dividend Boost

India's fiscal deficit for April-October reached 52.6% of the annual budget target, totaling Rs 8.25 lakh crore. The government received a significant boost from the RBI's record Rs 2.69 lakh crore dividend, helping improve revenue collection. Total expenditure during this period stood at Rs 26.25 lakh crore, with substantial spending on food and fertilizer subsidies. Finance Minister Nirmala Sitharaman aims to reduce the fiscal deficit to 4.4% of GDP as part of the government's fiscal consolidation plan.

Key Points: India Fiscal Deficit April-October 52.6 Percent Budget Target

  • Fiscal deficit at Rs 8.25 lakh crore represents 52.6% of annual budget estimate
  • RBI approved record Rs 2.69 lakh crore dividend boosting government revenue
  • Revenue receipts crossed Rs 18 lakh crore at 51.5% of budget target
  • Government spent Rs 2.46 lakh crore on food, fertilizer and petroleum subsidies
2 min read

India's fiscal deficit for April-October at 52.6 pc of budget target for 2025-26

India's fiscal deficit reaches 52.6% of annual target with Rs 8.25 lakh crore gap, boosted by RBI's record Rs 2.69 lakh crore dividend to government.

"This higher dividend will enable the Central government to reduce the fiscal deficit. - Finance Ministry Report"

New Delhi, Nov 28

India's fiscal deficit for the first seven months (April-October) of the current financial year came in at Rs 8.25 lakh crore, which worked out to 52.6 per cent of the annual budget estimate, according to figures released by the Finance Ministry on Friday.

The government’s total receipts crossed Rs 18 lakh crore during this period, constituting 51.5 per cent of the budget estimate for 2025-26, while overall expenditure in April to October was at Rs 26.25 lakh crore at 51.8 per cent of the budget target.

Revenue receipts stood at Rs 17.63 lakh crore, of which tax revenue was Rs 12.74 lakh crore and non-tax revenue came in at Rs 4.89 lakh crore. Tax revenue for April to October rose from Rs 13.04 lakh crore during the corresponding period the previous year.

Non-tax revenue recorded a sharp increase as the Reserve Bank of India approved a dividend of Rs 2.69 lakh crore to the Central government, compared with Rs 2.11 lakh crore transferred last year. This higher dividend will enable the Central government to reduce the fiscal deficit.

Revenue deficit was at Rs 2.44 lakh crore or 46.7 per cent of the financial year's budget target as the income tax burden on the middle class was reduced in the budget for the current financial year. The move has also placed more disposable income in the hands of consumers, which is expected to increase aggregate demand in the economy and spur growth.

On the expenditure side, the Central government spent about Rs 2.46 lakh crore on major subsidies such as food, fertilisers and petroleum. This was 64 per cent of the revised annual target.

Finance Minister Nirmala Sitharaman set the fiscal deficit target in the budget for 2025-26 at 4.4 per cent of GDP, as part of the government’s commitment to follow a descending glide path on the deficit to strengthen the country’s fiscal position. India’s fiscal deficit for 2024-25 stood at 4.8 per cent of GDP as part of the revised estimate.

A decline in the fiscal deficit strengthens the fundamentals of the economy and paves the way for growth with price stability. It leads to a reduction in borrowing by the government, thus leaving more funds in the banking sector for lending to corporates and consumers, which leads to higher economic growth.

- IANS

Share this article:

Reader Comments

P
Priya S
While the numbers look good on paper, I'm concerned about the subsidy expenditure being 64% of target already. Are we sure the benefits are reaching the intended beneficiaries? More transparency needed in subsidy distribution.
A
Arjun K
The tax relief for middle class is much appreciated! More disposable income means better consumption and economic growth. Hope this trend continues 🤞
S
Sarah B
As someone working in finance, I must say the fiscal deficit glide path from 4.8% to 4.4% is impressive. This shows serious commitment to macroeconomic stability. Well done!
K
Kavya N
But what about infrastructure spending? We need more focus on building roads, railways and digital infrastructure. That's what will really boost long-term growth!
M
Michael C
The numbers look positive but let's not forget that reducing fiscal deficit too quickly can hurt growth. Need to balance between fiscal discipline and growth requirements.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50