Fisc deficit narrows to 11.8% as non-tax revenue surges

Core sector index increased 4.3% in May on robust steel, cement and fertilizer production

- Rhik Kundu & Ravi Dutta Mishra

The government’s fiscal deficit for April-May, the first two months of the current fiscal, narrowed to 11.8% of annual estimates to ₹2.10 trillion, from 12.3% a year ago, government data showed on Friday.

This was largely due to a sharp jump in non-tax revenue—from interest payments and dividend among other sources—and lower revenue spending, which combined to offset a robust increase in capital expenditure and decline in net tax revenue.

Total receipts during April-May 2023 stood at ₹4.16 trillion, or 15.3% of the annual estimates, of which tax receipts stood at ₹2.78 trillion, or 11.9% of annual estimates.

Total expenditure rose to ₹6.26 trillion, or 13.9% of the annual estimates from ₹5.86 trillion a year ago.

The Centre aims to bring down the fiscal deficit, which is the difference between the government’s income and spending, to 5.9% of the gross domestic product during FY2024.