India’s fiscal deficit at 7.02 trln rupees in April-Sept

NEW DELHI (Reuters) -India’s fiscal deficit for the first six months of the financial year that started April 1 was 7.02 trillion Indian rupees ($84.35 billion), 39.3% of the estimate for the whole year, government data showed on Tuesday.

April-September net tax revenues were 11.6 trillion rupees, or 49.8% of the annual estimate, higher than 10.12 trillion rupees in the same period last year, according to the data.

Corporate tax collections rose 20% year on year to 4.51 trillion rupees, the data showed.

Total expenditure during the period was 21.19 trillion rupees, or 47.1% of the annual goal, higher than 18.24 trillion rupees in the same period last year.

In the first six months of the financial year, government capital expenditure – or spending on building infrastructure – was 4.91 trillion rupees, or 49% of the annual target, higher than 3.43 trillion rupees in the same period a year earlier.

Capex spending of 49% of the annual target “is favourable in light of the potential slowdown closer to the Parliamentary elections,” said Aditi Nayar, an economist at ICRA.

India aims to narrow its fiscal deficit to 5.9% of gross domestic product by the end of the current fiscal year, against 6.4% last year.

Higher-than-budgeted dividend surplus transfer of 874.2 billion rupees from the Reserve Bank of India is likely to offset shortfall in other revenue streams, Nayar said.

($1 = 83.2250 Indian rupees)

(Reporting by Nikunj Ohri and Shivangi Acharya; Editing by Ed Osmond, Mark Potter and Mark Porter)