India's fiscal deficit stands at 27% of full-year target for April-August

Fiscal deficit in Apr-Aug: The fiscal deficit for April-August stood at Rs 4.35 lakh crore or 27 per cent of the total target set for the fiscal year, the data released by the government showed on Monday.  While the government kept spending a whopping 110 per cent more than it did last year on its capital expenditure (capex) in July, it spent less in August. It has used 27.1 per cent of the budgeted Rs 11.11 lakh crore for capex in the first five months of the fiscal so far- less than 37.4 per cent during the same period last fiscal.

Tax revenue has remained an important component to control fiscal deficit. From the first five months, collection reached 38.6 per cent of the full-year target, and that is slightly higher than what was attained in April-August 2023 at 38.5 per cent.

As for the government, its following of the market borrowing schedule will ensure fiscal discipline. The Centre plans to garner Rs 6.61 lakh crore during the second half of the fiscal primarily through longer-tenure securities. The high dividends from the Reserve Bank of India itself, along with this strategy, should be supportive enough of meeting the fiscal targets on the fiscal side.