Fiscal deficit at 86.5% of target

Staying at over 15 lakh crore, India’s fiscal deficit between April and February of FY24 touched 86.5 per cent of the revised annual target at the end of February. The fiscal deficit or gap between the expenditure and revenue was at 82.8 per cent to `14.53 lakh crore in the same period a year ago, according to official data released on Thursday.

For 2023-24, the government’s fiscal deficit is estimated at Rs 17.35 lakh crore or 5.8 per cent of the gross domestic product (GDP). “The government's total receipts stood at `22.45 lakh crore (81.5 percent of corresponding RE 2023-24 of total receipts) as of February 2024,” said the data released Controller General Accounts (CGA).

“The total expenditure during April-february FY24 was `37.47 lakh crore, or about 83 per cent of the annual goal, against `34.94 lakh crore seen a year earlier. On the capital expenditure front, the government incurred an expense of `8.05 lakh crore between Aprilfebruary, 84.8 percent of its target for FY24. This was higher than the `5.90 lakh crore incurred in the same period a year ago,” it said.

Commenting the figure, Aditi Nayar, chief economist, head-research and outreach of ICRA said that the surge in the government’s fiscal deficit in February 2024 (`4 lakh crore vs `2.6 lakh crore in by of

February 2023) can be partly attributed to the higher tax devolution released during that month (`2.1 lakh crore vs `1.4 lakh crore in February 2023), which led to a decline in the revenue receipts and net tax revenues in that month.

In April-february FY2024, Nayar also said that the net tax revenues rose by 7 per cent, non-tax revenues expanded by 45 per cent boosted by the

RBI dividend, amidst a mild 1 per cent growth in revenue expenditure, and a robust 36.5 per cent Y-O-Y expansion in capex. “While there may be some slippage in the disinvestment target, we don’t expect the revised fiscal deficit target of Rs 17.3 lakh crore for FY2024 to be breached,” Nayar added.

Meanwhile, the growth of eight key infrastructure sectors slowed to 6.7 per cent in February on account of poor performance of some sectors like fertiliser. However, the growth rate is higher than January this year. “The growth of eight core sectors - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity was 4.1 per cent in January, while it was 7.4 per cent in February 2023,” the official data showed.

The eight core sectors contribute 40.27 per cent to the country’s Index of Industrial Production or IIP. Cumulatively also, the growth rate in the output of these sectors also slowed to 7.7 per cent in April-january this fiscal against 8.2 per cent in April-feb. 2022-23. The data also showed that the output growth of fertiliser was in the negative.

● THE NET TAX revenues rose by 7 per cent, non-tax revenues expanded by 45 per cent boosted by the RBI dividend, amidst a mild 1 per cent growth in revenue expenditure.