India’s Fiscal Deficit Improves to 0.8% of Annual Goal
Boosted by Record RBI Dividend
India’s fiscal deficit has significantly reduced. It is now just 0.8% of the annual target by May 2025. This improvement is due to a record Rs 2.69 lakh crore dividend from the Reserve Bank of India (RBI). The Controller General of Accounts (CGA) released this data.
Key Highlights
- April Deficit: The fiscal deficit in April was 11.9% of the Budget Estimates (BE) for 2025-26. This amounts to Rs 1.86 lakh crore.
- May Improvement: After receiving the RBI dividend, the deficit dropped to Rs 13,163 crore. This is just 0.8% of the full-year BE.
- Full-Year Target: The government aims for a fiscal deficit of 4.4% of GDP. This is Rs 15.69 lakh crore for 2025-26.
Comparison with Last Year
In the first two months of the previous fiscal year (2024-25), the fiscal deficit was 3.1% of the BE. This year’s figures show a notable improvement.
Government Income
The government received Rs 2.78 lakh crore as ‘dividends and profits’ in April-May. This amount is 86% of the budgeted estimates. Here’s a breakdown of the total income:
- Total Income: Rs 7.32 lakh crore (21% of BE 2025-26)
- Net Tax Income: Rs 3.5 lakh crore
- Non-Tax Income: Rs 3.56 lakh crore
- Non-Debt Capital Income: Rs 25,224 crore
Expenditure Breakdown
The total expenditure by the government during April-May was Rs 7.46 lakh crore. This is 14.7% of the BE. The spending includes:
- Revenue Expenditure: Rs 5.24 lakh crore
- Capital Expenditure: Rs 2.21 lakh crore
Out of the total revenue expenditure:
- Interest Payments: Rs 1.47 lakh crore
- Major Subsidies: Rs 51,253 crore
Share for State Governments
The CGA reported that Rs 1.63 lakh crore was given to state governments. This is their share of taxes and is Rs 23,720 crore more than the same period last year.
