India’s fiscal deficit for April-Sep stands at 36.5 pc of full-year target

New Delhi, Oct 31 India's fiscal deficit for the first six months of the current financial year (April-September) stood at Rs 5.73 lakh crore, which constitutes 36.5 per cent of the annual estimate in the budget, government data released on Friday showed.

The figures show that the fiscal deficit is well under control, which paves the way for stable growth of the economy.

Total receipts stood at Rs 17.30 lakh crore, while overall expenditure during April to September was at 23.03 lakh crore rupees. These comprised 49.5 per cent and 45.5 per cent, respectively, of the target set in the budget for 2025-26.

Revenue receipts stood at Rs 16.95 lakh crore, of which tax revenue comprised Rs 12.29 lakh crore and non-tax revenue worked out to Rs 4.66 lakh crore.

Non-tax revenue jumped as the Reserve Bank of India approved a dividend of Rs 2.69 lakh crore to the central government, up from Rs 2.11 lakh crore transferred last year. This will help the central government reduce its fiscal deficit further.

The total government expenditure during the April-Sept period went up to Rs 23 lakh crore compared with Rs 21.1 lakh crore during the same period of the previous year.

This reflects higher Government expenditure on big-ticket infrastructure projects in the highways, ports and railways sectors, which play a key role in spurring economic growth in the country amid increasing economic uncertainties triggered by geopolitical developments and the US tariff turmoil.

The central government has pegged its fiscal deficit target at 4.9 per cent of the gross domestic product (GDP) in its latest budget for FY25, compared with 5.6 per cent in the last fiscal year, which was lower than the revised estimates of 5.8 per cent.

A declining fiscal deficit reflects the strengthening of 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.

With the strong emerging fiscal position in 2025-26, the government is likely to have some additional headroom to meet unforeseen expenditure on account of defence, according to a recent Bank of Baroda report.

The observation assumes importance in the backdrop of the tensions with Pakistan following the Pahalgam terror attack and Operation Sindoor.

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