Fiscal deficit for the first quarter of the financial year that started in April was ₹1.36 lakh crore ($16.25 billion), or 8.1 per cent of the estimate for the whole year, government data showed on Wednesday.
Net tax receipts in April-June were ₹5.5 lakh crore, or 21 per cent of the annual target, compared with ₹4.34 lakh crore in the same period last year, according to the data.
Total government expenditure during the period was ₹9.7 lakh crore, or about 20.4 per cent of the annual goal, lower than the ₹10.51 lakh crore in the same period last year.
Government spending in the first three months of the current financial year was subdued due to general elections.
For the three months, the government’s capital expenditure or spending on building physical infrastructure was ₹1.81 lakh crore, or 16.3 per cent of the annual target, against ₹2.78 lakh crore in the same period a year earlier.
The government last week lowered its fiscal deficit target to 4.9 per cent of GDP for the financial year from 5.1 per cent in the interim budget in February, on the back of a surplus transfer from the central bank and robust tax revenues.
The target was lowered despite higher allocation in the federal budget for job creation and regions run by key allies in Prime Minister Narendra Modi’s recently formed coalition government.
The country’s budget gap stood at 5.6 per cent of GDP last fiscal year.
India will move away from setting fiscal deficit targets after the financial year 2026 and instead will use the government debt-to-GDP ratio as the anchor for fiscal policy.