Reserve Bank of India (RBI) stated in its latest monthly bulletin that during FY 2025-26 (April-July), the key deficit indicators of the union government stood higher, as compared to the corresponding period of the previous year. This was primarily due to higher revenue and capital expenditure alongside a slowdown in revenue receipts. The moderation in revenue receipts can be mainly attributed to lower direct tax collections, especially income tax. Growth in the indirect tax collections, however, was broadly in line with last year. Gross fiscal deficit of states during April-July 2025, as a proportion of budget estimates for the financial year, was higher than the same period last year.
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