India’s fiscal deficit narrowed to 8.1 per cent of the full year estimate in the first quarter of the year, compared with 25.3 per cent during a similar period in the previous year, government data showed.

The fiscal deficit stood at Rs 1.36 lakh crore, compared with Rs 50,615 crore in the first two months of the year.

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The deficit for the corresponding period of the previous year stood at  Rs 4.51 trillion, or 25.3 per cent of the annual estimate of Rs 17.87 trillion for FY24.

Notably, the annual estimate for the FY25 full year stood at Rs 16.85 trillion, according to the interim budget numbers.

However, the government brought down the fiscal deficit projected for this financial year to Rs 16.13 trillion in the annual budget presented last week.

As per the data released by the government, the revenue receipts were higher at Rs 8.3 lakh crore or 26.5 per cent of the full year target based on new Budget numbers compared with 22.4 per cent in Q1FY24.

Tax revenue was 21 per cent of the full year estimate compared with 18.6 per cent in the previous year.

Further, the capex utilisation was lower at 16.3 per cent of Budget estimates compared with 27.8 per cent in Q1FY25 in the previous year.

Loans disbursed at Rs 30,009 crore were just 17.5% of target compared with 27.2% in the first quarter of previous fiscal.

During the Q1, FY25 period, while non-tax revenue stood at ₹2.8 trillion or 70.1% of the interim budget estimates, total revenue receipts stood at ₹8.3 trillion, or 27.6% of the estimates for FY25.

It is to be highlighted that the RBI’s dividend payout will also be instrumental in compensating for any slippages in tax revenue or increased public spending in FY25, and ensuring the fiscal deficit reduction is in sync with the committed glide path of achieving a 4.5% fiscal deficit target by FY26.