 "Fiscal deficit")
The Centre’s fiscal deficit at the end of the first five months—April-August—of the current financial year touched 27 per cent of the budget estimates at Rs 4.35 trillion, according to the latest data released by the Controller General of Accounts (CGA).
The fiscal deficit—the gap between expenditure and revenue—was 36 per cent of the budget estimates for the corresponding period last year.
The government has set a fiscal deficit target of 4.9 per cent of gross domestic product (GDP) for the current financial year.
“We believe that the miss in the capex target is expected to provide some cushion to absorb the shortfall on account of disinvestments and taxes. Accordingly, ICRA expects the fiscal deficit to print in line or trail the FY2025 RBE of Rs. 16.1 trillion or 4.9 per cent of GDP, at the current juncture,” said Aditi Nayar, Chief Economist & Head - Research and Outreach at ICRA Ltd.
Net tax receipts for the period stood at Rs 8,73,845 crore, which was 33.8 per cent of the annual budget estimates, according to the data. Total expenditure at Rs 16,52,354 crore was lower at 34.3 per cent of the budget estimates compared to 37.1 per cent in the corresponding period last year.
Capital expenditure—spending on building physical infrastructure—for the first five months of the current financial year stood at Rs 3,00,987 crore or 27.1 per cent of the budget estimates. It was higher at 37.4 per cent in the corresponding period last year.
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In the first five months of this financial year, the government's capital expenditure was Rs 3.01 trillion, or 27 per cent of the annual target, compared to Rs 3.74 trillion for the same period a year earlier.
In its latest biannual Asian Development Outlook (ADO) released on Wednesday, the Asian Development Bank (ADB) flagged the “failure” of the government to meet its capital expenditure target in FY25 as a downside risk. “To achieve the planned capital expenditure target, central government capital spending needs to grow by 39 per cent year-on-year in the remaining nine months, which may be difficult,” the report said.
Of the total expenditure, Rs 13,51,367 crore was in the revenue account, and Rs 3,00,987 crore was in the capital account during the April-August FY25 period. Of the total revenue expenditure, Rs 4,00,160 crore was towards interest payments.
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