The fiscal gap was higher than the Rs 2.8 lakh crore recorded during the April-June period of the previous financial year, showing increased government spending even as revenue collections remained robust.
For FY27, the Centre has budgeted a fiscal deficit of Rs 16.96 lakh crore, equivalent to 4.3% of the country’s gross domestic product (GDP), while maintaining its broader fiscal consolidation roadmap.
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Government finances in the opening quarter were supported by healthy tax collections. Net tax receipts rose to Rs 6.4 lakh crore during April-June, compared with Rs 5.4 lakh crore in the corresponding period last year, indicating sustained growth in direct and indirect tax inflows despite global economic uncertainties.
Non-tax revenue also registered a modest increase, reaching Rs 3.8 lakh crore from Rs 3.7 lakh crore a year earlier. Such receipts typically include dividends from public sector enterprises and the Reserve Bank of India, spectrum-related income and various fees collected by the government.
Also read | India ready for wealth show while US drops bombsOn the expenditure side, total spending increased to Rs 13.6 lakh crore in the first three months of the financial year, up from Rs 12.2 lakh crore in the year-ago period. The higher outgo reflects the government’s continued emphasis on supporting economic activity through both revenue and capital expenditure.
Capital expenditure, a key driver of public investment, saw a notable rise during the quarter. Spending on infrastructure and other asset-creating projects stood at Rs 3.4 lakh crore, compared with Rs 2.75 lakh crore in the same period last year.
The increase in capital outlay is in line with the Centre’s strategy of using public investment to strengthen long-term growth, improve logistics and crowd in private sector investment.
While presenting the Union Budget for FY27, Finance Minister Nirmala Sitharaman pegged the fiscal deficit target at 4.3% of GDP for this financial year, maintaining the government’s fiscal consolidation path and its commitment to keeping the budget gap under control.