NEW DELHI India's fiscal position remains solid with steady revenue growth, and headline inflation is likely to remain within the target band, the government said on Monday.

"Revenues generated from direct and indirect taxes have exhibited steady growth and are indicative of the strength of underlying economic activity and a broadening tax base," India's finance ministry said in its monthly economic review for September.

Headline inflation was also likely to remain within the target band, the report said, due to the downward trajectory observed in core inflation.

India's retail inflation eased to a three-month low in September on the back of softer vegetable prices, but remained above a 4% target that the central bank has signalled would be key before easing rates.

"Rationalisation of revenue expenditure has enabled the front-loading of capital expenditure while keeping the market borrowing programme tied to the budgeted target," the monthly economic report said.

A Reuters poll last month projected India to be the fastest-growing major economy this fiscal year, supported by government spending ahead of May's general election.

(Reporting by Nikunj Ohri; Writing by Shilpa Jamkhandikar; Editing by Christopher Cushing and Mike Harrison)