India's Fiscal Deficit Stands at Rs 50,615 Crore for First Two Months of FY25

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India's Fiscal Deficit Stands at Rs 50,615 Crore for First Two Months of FY25

According to data released by the Controller General of Accounts (CAG) on June 28, India's fiscal deficit for the first two months of FY25 stood at Rs 50,615 crore, amounting to 3 percent of the estimated deficit for the entire fiscal year. During April-May, net tax revenues reached Rs 3.19 lakh crore, representing 12 percent of the annual target, an increase from Rs 2.78 lakh crore in the same period last year.

The data from CGA revealed that revenue receipts surpassed expenditure, creating a surplus of Rs 90,923 crore. This surplus was attributed to higher tax revenue and the RBI dividend, keeping revenue receipts at 19 percent of the budgeted estimates for the April-May FY25 period, a rise from around 15 percent in the corresponding period of the previous year. Despite government spending totaling Rs 6.23 lakh crore during this period, about 13 percent of the annual target, slightly lower than the Rs 6.26 lakh crore spent in the same period last year, the expenditure was impacted by the general elections held in April and May.

In the Interim Budget, the government set a fiscal deficit target of 5.1 percent of GDP for the current fiscal year, a decrease from the revised figure of 5.6 percent in the previous year. Additionally, the Ministry of Commerce and Industry reported an increase of 6.3 percent in the combined Index of Eight Core Industries in May compared to the previous year. Notably, production growth was seen in electricity, coal, steel, natural gas, and refinery products. The Index of Eight Core Industries measures the performance of crucial sectors including cement, crude oil, electricity, natural gas, and steel, with positive growth rates recorded for key sectors.