India's fiscal deficit target stood at Rs 3.52 lakh crore in the April-June period, touching 21.2 per cent of the annual target as against 18.2 per cent in the year-ago period, according to official data.
Data released on Friday by Controller General of Accounts revealed that tax collections grew, partly due to higher inflation, helping the government collect more goods and services tax (GST), as well as higher corporate tax receipts on improved economic activity.
On the expenditure side, the government's spending on major subsidies, including food and fertilisers, came down around Rs 68,000 crore during April-June period, compared to over a Rs 1 lakh crore a year earlier. This has given a confidence to Finance Ministry officials that they could meet the targeted fiscal deficit of 6.4 per cent of the GDP for the current fiscal year ending in March 2023, despite headwinds on the economic front.
According to the Reuters report, Kaushik Das, chief economist at Deutsche Bank, said the government could hold the FY22-23 deficit close to the target, assuming no further tax duty cuts or additional spending was announced.
In May, the government cut taxes on petrol and diesel and cooking gas to provide a relief to consumers, after a surge in global crude oil prices.
Net tax receipts rose to Rs 5.06 lakh crore in the first three months through June while total expenditure was Rs 9.48 lakh crore, the data showed.
The government told lawmakers this week that in the first three months of current financial year, the GST collections rose to Rs 2.09 lakh crore or nearly 27 per cent of the target for the whole year.
The country’s economy is expected to grow around 7.2 per cent year-on-year in the current fiscal year, down from earlier estimates of over 8 per cent, and 8.7 per cent in the previous year.