At Rs 11 trillion, fiscal deficit narrows to 64% of revised estimates

Both revenue and capital expenditure for the April-January FY2024 period was around 75 per cent

The Centre has incurred only three-fourths of the total revised expenditure estimate for the first ten months of the current financial year, leaving room for higher spending in the February-March period, the latest data by the Controller General of Accounts showed.

The fiscal deficit for the April-January FY 2024 stood at Rs 11 trillion, which is around 64 per cent of the revised estimates compared to 67.8 per cent in the corresponding period last year. 

“It may be assumed that with expenditure being expedited in February-March, the fiscal deficit target would be met. It could however be marginally lower in case these expenses are not incurred,” said Madan Sabnavis, Chief Economist, Bank of Baroda. 

 

The revenue and capital expenditure for the April-January FY2024 period was around 75 per cent.

Experts said that while the balance amount could be spent in the next two months, there need to be enough projects available for investment on the capex side. 

There was a 26.5 per cent year-on-year (Y-o-Y) expansion in capex.

However, the government's capex dropped to Rs 476 billion in January 2024 from nearly Rs 800 billion in January 2023. 

“With Rs 2.3 trillion left to be incurred in Feb-March 2024 to meet the full-year target for capex this fiscal, substantially higher than the Rs 1.7 trillion reported in the same months of FY2023, ICRA expects the GoI’s capex to undershoot the FY2024 RE by at least Rs 0.5 trillion,” said Aditi Nayar, Chief Economist, Icra. 

Of the total revenue expenditure, Rs 8,21,731 crore was on account of interest payments and Rs 3,15,559 crore on major subsidies.

“While there may be some slippage in the disinvestment target and capex may trail the FY2024 RE, Icra does not expect the revised fiscal deficit target of Rs 17.3 lakh crore for FY2024 to be breached,” Nayar added.

The non-debt capital receipts stood at 61 per cent mainly on account of disinvestment receipts where only 42 per cent of the lower revised target of Rs 30,000 crore was achieved. 

“Given that there has not been much movement in February it would be a challenge to meet this target,” Sabnavis added. 

While net tax revenues rose by 11 per cent, the non-tax revenues expanded by 46 per cent boosted by the RBI dividend, the data showed. 

The CGA data showed that Rs 8,20,250 crore has been transferred to state governments as devolution of share of taxes by the central government up to January 2024, which is Rs 1,52,480 crore higher than the previous year.