India’s federal fiscal deficit in the first half of the financial year through September rose to Rs6.20 trillion ($74.91 billion) from 5.27 trillion a year earlier, though rising tax collections helped offset a higher subsidy bill.

India’s fiscal deficit for the April to September period touched 37.3 per cent of annual estimates, official data showed on Monday, as the government spent more on fertiliser, food and fuel subsidies.

Net tax collections during April-September rose to Rs10.12 trillion, about 10 per cent higher than a year before, helping the government despite growing fears of a shortfall in receipts from the sale of stakes in state-run firms this year.

The federal government’s spending bill is expected to rise by nearly Rs2 trillion this fiscal year, according to several economists’ estimates, following higher allocations for subsidies, stretching the fiscal deficit.

However, a rise in goods and services tax receipts helped by a pick-up in urban demand and higher inflation could help to meet the budgeted fiscal deficit target, they said.

Total expenditure for the first six months of the current financial year was 18.24 trillion rupees, compared to 16.26 trillion rupees a year earlier, data showed.

In February, while presenting the annual budget, Finance Minister Nirmala Sitharaman set the fiscal deficit target at 6.4 per cent of gross domestic product for 2022/23 starting April, compared to 6.7 per cent in the previous fiscal year.

The government aims to spend nearly 40 trillion rupees in the current financial year, up about 4 per cent from the previous year but down in real terms due to near 7 per cent inflation this year.

Meanwhile Indian shares on Monday registered their biggest monthly gains since July, as stocks across sectors advanced and investors awaited outcomes from major central banks’ policy meetings later this week.

The NSE Nifty 50 index rose 1.3 per cent to 18,012.2 at close, and the S&P BSE Sensex finished 1.3 per cent higher at 60,746.59, both recording their third straight session of gains.

For the month, the indexes added more than 5 per cent each on the back of corporate earnings reports and hopes of a less-hawkish stance from major central banks.

“The US economy’s strength is indicating a lower probability of an immediate US recession and indications that inflation is plateauing. This might enable the Fed to slightly moderate their hawkish stance,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Canadian and Australian central banks have hiked rates below expectations. If this trend spreads, that will favour the rally’s continuation in the short-term, Vijayakumar added.

Investors this week will be looking for outcomes of policy meetings of the US Federal Reserve and the Bank of England.

A meeting of the Reserve Bank of India’s Monetary Policy Committee is also expected.

Scheduled for Nov. 3, the meeting would potentially discuss the Committee’s response to the government on its failure to stick to its inflation target for three quarters in a row.

In domestic trading, Nifty’s IT, automobile, and finance indexes were among the top performers, adding more than 1% each.

UltraTech Cement was the top percentage gainer on the Nifty 50, closing 4.2 per cent higher.

Telecom operator Bharti Airtel ended 1.9 per cent up, after hitting a record high, ahead of its quarterly results.

Life Insurance Corp of India finished 1.9 per cent higher after Reuters reported, citing sources, that it plans to transfer nearly $22 billion from policyholders’ funds into a fund earmarked to pay dividends or issue bonus shares.  The Indian rupee has declined in each of the ten months this year to notch its biggest losing streak in almost four decades as the US Federal Reserve’s hawkish stance on monetary policy catapulted the dollar to two-decade highs.

The dollar index is up 16 per cent this year, having scaled 114.8-levels last month to trade near its 2002 peak. Its ascent has pressured currencies globally, especially ones in emerging Asian markets.

The Indian rupee fell 1.8 per cent against the dollar in October, taking its slide for the year to nearly 11 per cent.

Surging oil prices due to the Russia-Ukraine conflict and weakness in the Chinese yuan have only piled on more pressure on the rupee and helped send it to a record low of 83.29 per dollar earlier this month.

The rupee’s losses have been deeper in the past two months, with market participants reckoning that the Reserve Bank of India let the currency slide after having helped hold it at the 79-80 levels for a long time.

Almost all traders and economists expect there will be no let-up in the pressure on the rupee for the rest of the year as the Fed stays on its aggressive rate-hike path after making fighting inflation its priority.