New Delhi: Union Finance Minister Nirmala Sitharaman holds a folder-case containing Union Budget 2023-24 outside the Finance Ministry at North Block, in New Delhi, Wednesday, Feb. 1, 2023. Sitharaman will be presenting her fifth Union Budget in Parliament.
Credit: PTI Photo
New Delhi: India’s fiscal deficit, or the gap between the central government’s expenditure and revenue, narrowed to Rs 8.47 lakh crore in April-November 2024 period, which is 6.6% lower than Rs 9.1 lakh crore recorded in the corresponding period of the previous year, official data showed on Tuesday.
In the first eight months of the financial year, the central government’s fiscal deficit was contained at 52.5% of the full year’s target of Rs 16.13 lakh crore.
Lower capital expenditure is the key reason for this. The centre’s capex during April-November 2024 period was 12.3% lower when compared with the corresponding period of the last year.
Analysts have said the Rs 11.11 lakh crore budgeted capex for 2024-25 is unlikely to be achieved due to the slow pace in the first half of the year.
The centre’s capex needs to expand by 65% year-on-year in December 2024-March 2025 or record a monthly run rate of Rs 1.5 lakh crore to meet the FY 2025 revised budgetary estimate, which appears increasingly daunting, said Aditi Nayar, Chief Economist at ICRA.
“We are apprehensive that the capex target of Rs 11.1 lakh crore for FY2025 will be missed by a margin of at least Rs 1.0-1.5 lakh crore,” she said.
The government’s fiscal deficit narrowed despite a sluggish increase in tax revenues. The net tax revenues increased marginally by 0.5% year-on-year in the April-November period. However, non-tax revenues surged by 50% during the period under review boosted by the RBI dividend.
During the period, administrative expenditure grew by 7.8% when compared with the corresponding period last year while the capex was 12.3% lower.
Total expenditure incurred by the centre stood at Rs 27.41 lakh crore by November-end, which is 56.9% of the full year target. Out of this Rs 22.27 lakh crore was on revenue account and Rs 5.13 lakh crore on capital account, data released by the Controller General of Accounts (CGA) showed.