India's gross tax revenue for the April-July period in FY24 grew only by 2.8% to Rs 8.9 trillion compared to the same period the previous year. This sluggish growth was largely attributed to a decline in direct tax collections, offsetting the healthy expansion in goods and services tax (GST) collections and Customs duties.
Net tax revenue contracted by 12.6% to Rs 5.8 trillion until July, accounting for 25% of the full-year target. The fiscal deficit for the first four months of FY24 widened to Rs 6.06 trillion, or 33.9% of the full-year target of Rs 17.87 trillion, mainly due to increased expenditure and upfronting of tax devolution. However, non-tax revenues doubled during the period, and capital expenditure increased by 52% to stimulate economic growth. Meeting the fiscal deficit goal of 5.9% of GDP for FY24 remains a challenge.