NEW DELHI - India's federal fiscal deficit for the three months through June rose lower-than expected to 3.5 trillion rupees ($44.17 billion), helped by a lower spending on subsidies and higher tax collections, government data showed on Friday.

Tax collections grew, partly due to higher inflation, helping the government collect more goods and services tax (GST), as well as higher corporate tax receipts on improved economic activity.

On the expenditure side, the government's spending on major subsidies including food and fertilisers, came down around 680 billion rupees during April-June period, compared to over a trillion rupees a year earlier.

This has given a confidence to finance ministry officials that they could meet the targeted fiscal deficit of 6.4% of GDP for the current fiscal year ending in March 2023, despite headwinds on the economic front.

Kaushik Das, chief economist at Deutsche Bank said the government could hold the 2022/23 fiscal deficit close to the target, assuming no further tax duty cuts or additional spending was announced.

In May, the government cut taxes on petrol and diesel and cooking gas to provide a relief to consumers, after a surge in global crude oil prices.

Net tax receipts rose to 5.06 trillion rupees in the first three months through June while total expenditure was 9.48 trillion rupees, the data showed.

The government told lawmakers this week that in the first three months of current financial year, the GST collections rose to 2.09 trillion rupees or nearly 27% of the target for the whole year.

India's economy is expected to grow around 7.2% year-on-year in the fiscal year in the current fiscal year, down from earlier estimates of over 8%, and 8.7% in the previous year.

(Reporting by Manoj Kumar and Aftab Ahmed; Editing by Frank Jack Daniel)