The Centre’s fiscal deficit widened in April-February 2024 to ₹15.01 lakh crore, which is about 86.5 per cent of Revised Estimate of ₹17.35-lakh crore, official data released on Thursday showed.

The fiscal deficit in the same period a year ago stood at ₹14.53-lakh crore, which was 82.8 per cent of revised estimate. 

Till end January this fiscal, fiscal deficit was at about ₹11-lakh crore. 

Finance Minister Nirmala Sitharaman had surprised in the recent Interim Union Budget by stepping up pace of fiscal consolidation and pegged the fiscal deficit aim at 5.8 per cent of GDP for current fiscal and 5.1 per cent for next financial year. 

Higher tax devolution

The surge in Centre’s fiscal deficit in February 2024 (₹4-lakh crore vs ₹2.6-lakh crore in February 2023) can be partly attributed to the higher tax devolution released during the month under review (₹2.1-lakh crore vs ₹1.4-lakh crore in February 2023). This led to a decline in the revenue receipts and net tax revenues in February 2024, said Aditi Nayar, Chief Economist, Head-Research & Outreach, ICRA Ltd.

Meanwhile, total expenditure during April-February FY24 was ₹37.47-lakh crore, or about 83 per cent of the annual target, against ₹34.94-lakh crore seen a year earlier.


On the capital expenditure front, government outlay stood at ₹8.05-lakh crore between April-February, 84.8 per cent of its target for FY24. This was higher than the ₹5.90-lakh crore incurred in the same period a year ago. The government’s capex-led growth strategy has been a crucial factor behind the economy’s robust GDP growth in post-Covid years and helped the country maintain status of fastest growing large economy in the world. 

Madan Sabnavis, Chief Economist, Bank of Baroda, said the government accounts show that the Centre is still around ₹7.43-lakh crore short of the expenditure target which means that this amount would be spent in March 2024. 

Major shortfalls are in agriculture (₹20,668 cr); rural (₹48,088 crore); chemicals and fertilizers (₹16,150 crore); roads (₹26,000 crore) and consumer affairs (₹35,117 crore).

There could be some savings here at about ₹50,000-60,000 crore if these budgets are not exhausted, he added.

As of February, any savings combined with a higher than projected GDP growth rate can help reduce the fiscal deficit ratio by 0.1-0.2 per cent of GDP, according to Sabnavis. 

Indian economy is widely expected to grow close to 8 per cent this fiscal, higher than the government’s projected growth level of 7.6 percent. 

While strong tax collections at the Centre are expected to help rein in fiscal deficit within the targeted level, there is risk of fiscal slippage at the level of States, warned some analysts. 

Tax revenues

The Centre’s net tax revenues for April-February stood at ₹18.5-lakh crore, which is 79.6 per cent of the overall target. In April-February 2023, the net tax revenues stood at ₹17.32-lakh crore.

Meanwhile, non-tax revenue for April-February 2024 stood at ₹3.6-lakh crore, or 95.9 per cent of the overall target, official data showed.

Total receipts for the 12-month period stood at ₹22.5-lakh crore, which was 81.5 per cent of the overall target.