In its budget for FY24, the government had set a tax collection target of ₹33.61 trillion for FY24, which is about 10.1% higher year-on-year.

The SBICap report titled 'Fiscal Position and Borrowing Update - October 2023', said that it anticipated a moderation in direct tax growth in October due to an uptick in tax refunds, with robust tax collections alleviating concerns regarding revenue falling short of budget estimates.

According to the latest data, the Centre's net direct tax collection between 1 April and 16 September stood at ₹8.65 trillion, up 23.5% on an annual basis.

Goods and Services Tax collected by the government during the same period stood at ₹9.93 trillion, up 11% on year.

SBICaps said that it expects an increased dividend received by the government from the Reserve Bank of India (RBI) and public sector banks to offset any deficit from divestment proceeds.

Capital expenditure has been frontloaded, exhibiting a substantial 48% annual growth during the April-August period, the report said.

The Centre's total expenditure during April-August stood at ₹16.71 trillion, or 37.1%, of the budget estimated for FY24.

The Indian government's fiscal deficit during the first five months of the current financial year stood at ₹6.43 trillion, or 36% of the annual estimates of ₹17.87 trillion, according to the data released by the Controller General of Accounts last week.

"The government has prudently maintained a financial buffer, affording it the flexibility to navigate the borrowing landscape with finesse," the SBICaps report said.

"This strategic cushion would help explore a minimal net borrowing requirement via T-bills, higher redemption of impending maturities as opposed to the initially budgeted switch of ₹1 trillion, a heightened allocation towards revenue expenditure, and a moderation in the inflow of funds from small saving schemes," it added.