April-June fiscal deficit narrows amid fall in subsidies

INDIA-CURRENCY-STOCKS
A vegetable seller counts Indian rupee notes in Mumbai on May 9, 2022. - The Indian rupee plunged to a fresh all-time low against the US dollar on May 9, as aggressive US monetary policy roiled sentiment and foreign investors continued to dump domestic stocks. (Photo by INDRANIL MUKHERJEE / AFP)

New Delhi: India's federal fiscal deficit for the three months through June rose lower-than expected to 3.5 trillion rupees ($44.17 billion), helped by a lower spending on subsidies and higher tax collections, government data showed on Friday.

Tax collections grew, partly due to higher inflation, helping the government collect more goods and services tax (GST), as well as higher corporate tax receipts on improved economic activity.

On the expenditure side, the government's spending on major subsidies including food and fertilisers, came down around 680 billion rupees during April-June period, compared to over a trillion rupees a year earlier.
This has given a confidence to finance ministry officials that they could meet the targeted fiscal deficit of 6.4% of GDP for the current fiscal year ending in March 2023, despite headwinds on the economic front.

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