For the third month in a row, the Centre's fiscal deficit was lower compared to the year-ago period, coming in at Rs 1.02 lakh crore in October, down 26 percent year-on-year (YoY). However, the fall in the fiscal deficit was due to the Centre's expenditure contracting more than its income.

In October, the Union government's total expenditure was down 14 percent YoY at Rs 2.75 lakh crore, with capital expenditure down 15 percent at Rs 56,296 crore. However, the Centre remains on track to meet its full-year record capex target of Rs 10 lakh crore, with the figure for April-October standing at Rs 5.47 lakh crore, or 54.7 percent of the target.

For the first seven months of 2023-24, the government's total spending stood at Rs 23.94 lakh crore, 12 percent higher than the same period last year. Total receipts, meanwhile, were up 15 percent YoY in April-October at Rs 15.91 lakh crore, propelled by a 49 percent increase in non-tax revenue - thanks to the huge surplus transferred by the Reserve Bank of India (RBI) in May.

On the tax front, the Centre's gross tax revenue in April-October recorded a growth of 14 percent, while net tax revenue was up 11 percent over the same period. Divestment, however, continues to lag, at just Rs 8,000 crore.

Transfers to states reduce the Centre's net tax collections. Like in September, the Centre transferred Rs 72,961 crore to states as tax devolution, taking the total for the first seven months of 2023-24 to Rs 5.28 lakh crore, 22 percent higher YoY.

Gross GST collection crosses Rs 1.60 lakh croremark for sixth time in current fiscal

The gross Goods and Services Tax or GST revenue collected in the month of November, 2023 is Rs 1,67,929crore out of which CGST is Rs 30,420 crore, SGST is Rs 38,226 crore, IGST is Rs 87,009 crore (including Rs 39,198 crore collected on import of goods) and cess is Rs 12,274 crore (including Rs 1,036 crore collected on import of goods). The government has settled Rs 37,878 crore to CGST and Rs 31,557 crore to SGST from IGST. The total revenue of Centre and the States in the month of November, 2023 after regular settlement is Rs 68,297 crore for CGST and Rs 69,783 crore for the SGST. Gross GST collection has crossed Rs 1.60 lakh croremark for the sixth time in FY 2023-24. GST collection is higher by 11.9% Y-o-Y for FY2023-24 upto November, 2023.

The revenues for the month of November, 2023 are 15% higher than the GST revenues in the same month last year and highest for any month year-on-year during 2023-24, upto November 2023. During the month, the revenues from domestic transactions (including import of services) are 20% higher than the revenues from these sources during the same month last year. It is for the sixth time that the gross GST collection has crossed Rs 1.60 lakh crore mark in FY 2023-24.The gross GST collection for the FY 2023-24 ending November, 2023 [Rs 13,32,440crore, averaging Rs 1.66 lakh per month] is 11.9 % higher than the gross GST collection for the FY 2022-23 ending November, 2022 [Rs 11,90,920 crore, averaging Rs 1.49 lakh crore per month].

RBI says around 97% of Rs 2000 banknotes have been returned till November end

The Reserve Bank of India (RBI) announced on December 1, 2023, that around 97 per cent of Rs 2,000 banknotes have been returned till November 30, 2023. The Reserve Bank of India (RBI) had announced the withdrawal of Rs 2000 denomination banknotes from circulation vide Press Release 2023-2024/257 dated May 19, 2023. The status of withdrawal of Rs 2000 banknotes has been periodically published by the RBI. The facility for deposit and / or exchange of the Rs 2000 banknotes was available at all bank branches in the country initially upto September 30, 2023, which was later extended upto October 07, 2023.

The facility for exchange of the Rs 2000 banknotes was also available at the 19 Issue Offices of the Reserve Bank (RBI Issue Offices) from May 19, 2023. From October 09, 2023, RBI Issue Offices, in addition to exchanging Rs 2000 denomination banknotes across the counters, are also accepting Rs 2000 banknotes from individuals / entities for deposit to their bank accounts. Further, members of the public from within the country can send Rs 2000 banknotes through India Post from any post office in the country, to any of the RBI Issue Offices for credit to their bank accounts in India.

Outlook:

The recent slide in crude oil prices and overall muted expectations towards global monetary policy should help curb the government securities yields in near term. Meanwhile, the five-year extension to the provision of free foodgrain under the PradhanMantriGaribKalyan Anna Yojana (PMGKAY) has not hurt the government's medium-term fiscal consolidation roadmap, Finance Secretary TV Somanathan has noted.