India’s fiscal deficit reaches 86.5% of full financial year target in 11 months

New Delhi, March 28 (IANS) India’s fiscal deficit for the first 11 months of 2023-24 reached Rs 15.01 lakh crore, 86.5% of the revised annual estimate of Rs 17.35 lakh crore, as per Controller General of Accounts data released on Thursday. The decrease in deficit can be attributed to higher tax receipts and non-tax revenue.

Despite increased government spending on infrastructure projects to boost economic growth, the fiscal deficit has decreased. Capital expenditure rose to Rs 8.06 lakh crore in April-February, accounting for 84.8% of the annual estimate, up from Rs 5.90 lakh crore in the previous year.

The Finance Ministry aims to reduce the fiscal deficit to 5.8% of the GDP in 2023-24, down from 6.4% in the previous fiscal year. A lower deficit indicates a stronger economy, reduces the need for borrowing, and boosts lending to businesses for investment, fostering growth and employment while also controlling inflation.

“A lower fiscal deficit reflects stronger macroeconomic fundamentals as it also means that the government will need to borrow less which leaves more money in the banking system to lend to corporates for investment. This in turns fuels growth and creates more employment. A smaller fiscal deficit also helps to keep inflation in check,” the report stated.