High tax collections due to tighter rules for the goods and services tax (GST), and an economy on the recovery path coupled with expenditure compression resulted in the Centre's fiscal deficit narrowing to 21.3 per cent of the Budget Estimates (BE) in the first four months of the current financial year.

       In absolute terms, the fiscal deficit at Rs 3.3 trillion was the lowest for the first four months in nine years.

       The deficit had breached BE at this point of time in the previous year. That and transparency in food subsidies had led to fiscal deficit widening to 9.5 per cent of GDP against BE of 3.5 per cent during 2020-21.

       The government had budgeted the deficit to come at 6.8 per cent of GDP in the current financial year. Economists believed that it could be less than that, given the trend of the first four months.

       "We expect FY'22 fiscal deficit to be lower than BE," India Ratings chief economist Devendra Pant said.

       Data released by the Controller General of Accounts showed that the central government's total receipts stood at Rs 6.83 trillion or 34.6 per cent of BE 2021-22 up to July against just 10.4 per cent of the BE of 2019-20 in the same period of the previous financial year.

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       Of the total receipts, Rs 5.29 trillion came from taxes. One of the major contributors is GST collections which improved after the government enforced e-invoicing and other compliance rules.

       Non-tax revenues such as dividends from RBI and public sector banks yielded Rs 1.39 trillion. Non-debt capital receipts fetched just Rs 14,148 crore as disinvestment is yet to pick up pace.

       The government's total expenditure was Rs 10.04 trillion till July this year, accounting for 28.8 per cent of BE against 34.7 per cent in the corresponding period of 2020-21.

       Of this, Rs 8.8 trillion was on the revenue account such as salaries, pension, subsidies etc. If interest payments are taken out, revenue expenditure, in fact, contracted 12.6 per cent year-on-year, said Pant.

       Capital expenditure stood at Rs 1.3 trillion,accounting for 23.2 per cent of BE against 27.1 per cent in the first four months of the current financial year.