Fiscal Economics

The central government's fiscal deficit stood at 17.9 per cent of the full-year target at the end of June, according to data released by the Controller General of Accounts (CGA) on Thursday. It was at 8.4 per cent of Budget Estimates (BE) of 2024-25 in the first three months of the previous financial year. In absolute terms, the fiscal deficit, or gap between the government's expenditure and revenue, was Rs 2,80,732 crore in the April-June period of the 2025-26 fiscal year. The Centre estimates the fiscal deficit during 2025-26 at 4.4 per cent of the GDP, or Rs 15.69 lakh crore. According to the CGA, Centre's net tax revenue was Rs 5.4 lakh crore, or 19 per cent of corresponding BE 2025-26 of total receipts, up to June 2025. In the corresponding period of the previous fiscal year, the net tax revenue was at 21.3 per cent of that year's BE. The data on monthly accounts showed that the total expenditure during the first quarter was at Rs 12.22 lakh crore, or 24.1 per cent of BE. In

The Centre has set a target of achieving a fiscal deficit of 4.4 per cent of GDP in FY26, down from the revised estimate (RE) for FY25 of 4.8 per cent

The RBI's frequent intervention to cap spreads in bond markets of heavily indebted states also leads to market indiscipline

Total government expenditure during the period was Rs 9.7 trillion, or about 20.4 per cent of the annual goal, lower than the Rs 10.51 trillion in the same period last year

The Kerala Government on Thursday criticised the BJP-led Centre's fiscal approach towards the state, noting that the state had to seek a solution to the financial impasse in the Supreme Court. The state government also clarified that only 3.7 per cent of Kerala's own tax revenue comes from alcohol, which is one of the lowest percentages among all states, contrasting with those where it can be as high as 22 per cent. These were part of the customary policy address which was presented before the State Assembly by Governor Arif Mohammed Khan. Khan swiftly concluded the address by reading out only its final paragraph. "My Government places the considered opinion before the Union Government that Kerala should be ensured it's well deserved share in the distribution of taxes. My Government views with concern the holding back of eligible grants and share of assistance in Centrally Sponsored Schemes. "My Government is put to added liquidity stress because of the retrospective cut in borrowi

China's economy for the October-December quarter grew at a quicker rate, allowing the Chinese government to hit its target of about 5 per cent annual growth for 2023 even though trade data and the economic recovery remain uneven. Official data released on Wednesday showed that the Chinese economy grew 5.2 per cent for 2023, surpassing the target of about 5 per cent that the government had set. The growth for 2023 is likely helped by 2022's GDP of just 3 per cent as China's economy slowed due to COVID-19 and nationwide lockdowns during the pandemic. For the fourth quarter, China's gross domestic product also grew at 5.2 per cent compared to the same time last year. On a quarterly basis, the economy rose 1 per cent in Q4, slowing from the expansion of 1.3 per cent in July-September. Officials from China's National Bureau of Statistics said that measures including strengthened macro regulation, and redoubled efforts to expand domestic demand, optimize structure, boost confidence and .

Anne Krueger, First deputy managing director of the International Monetary Fund spoke on India's growth prospects

The Goods and Services Tax regime has altered the contours of fiscal federalism in India, and steady growth of GST revenue is a robust barometer of the reform's success, Economic Advisory Council to the PM (EAC-PM) chairman Bibek Debroy said. In a working paper titled 'How the Pennies Drop: What GST revenue data tells us and What it doesn't', Debroy also proposed constructing a GST Rate Index to help track relative movements of the tax rates and get a sense of how it impacts tax collections and taxpayer behaviour. "The introduction of a Goods and Services Tax (GST) in India in 2017 not only impacted the economy but it also altered the contours of fiscal federalism in India. "Amongst others, the steady growth of GST revenue has been a robust barometer of the success of the reform," he said. Debroy also suggested a novel mechanism for computing the collection rate of GST, using only publicly available data, saying this has potential applications in revenue modelling; analysis of tren

On the fiscal side, the monthly data released by the CGA shows that the direct tax collections contracted by 1% in the first quarter of 2023-24

One aspiration for the GST system was that it would lead to regional development as it is a destination-based tax regime

Instead of municipalities and states depending on transfers from the Centre, it should be the other way around

Centre's capex outlay may touch 20 per cent of full-year target in Q1 at Rs 1.5 trillion

Sri Lankan Prime Minister Ranil Wickremesinghe on Wednesday said the country has missed a payment to the Asian Development Bank,

Says states don't have fiscal flexibility for exigencies as Centre has

Roll-back will increase fiscal risks

The idea that fiscal prudence and welfare of the less well-off are mutually exclusive is misplaced

Although the budgetary exercise has made a virtue out of necessity, the change in fiscal stance could end up having a happy outcome

With modest revenue effort, the burden of cutting the deficit will fall on a big expenditure contraction

Here's a selection of Business Standard opinion pieces for the day

The economy requires a fiscal battle plan and this, in turn, requires a fiscal responsibility framework