India’s April-Sept fiscal deficit touches ₹6.2 lakh cr., tax receipts rise

India’s fiscal deficit in the first half of the financial year through September rose to ₹6.2 lakh crore from ₹5.27 lakh crore a year earlier, though rising tax collections helped offset a higher subsidy bill.

The fiscal deficit for the April to September period touched 37.3% of annual estimates, official data showed on Monday, as the government spent more on fertiliser, food and fuel subsidies.

Net tax collections during April-September rose to ₹10.12 lakh crore, about 10% higher than a year before, helping the government despite growing fears of a shortfall in receipts from the sale of stakes in state-run firms this year.

The Union government’s spending bill is expected to rise by almost ₹2 lakh crore this fiscal year, according to several economists’ estimates, following higher allocations for subsidies, stretching the fiscal deficit.

However, a rise in goods and services tax receipts helped by a pick-up in urban demand and higher inflation could help to meet the budgeted fiscal deficit target, they said.

Total expenditure for the first six months of the current financial year was ₹18.24 lakh crore, compared with ₹16.26 lakh crore a year earlier, data showed.

In February, while presenting the annual budget, Finance Minister Nirmala Sitharaman set the fiscal deficit target at 6.4% of gross domestic product for 2022/23, compared with 6.7% in the previous fiscal year.

The government aims to spend almost ₹40 lakh crore in the current financial year, up about 4% from the previous year but down in real terms due to near 7% inflation this year.