The Centre’s fiscal deficit in April-November stood at Rs 8.47 lakh crore, or 52.5% of the Budget estimate (BE), a release by the finance ministry said.
In the first eight months of the last financial year, the fiscal deficit stood at 50.7% of the respective BE.
The Centre has pegged the fiscal deficit in FY25 at Rs 16.13 lakh crore, or 4.9% of the GDP. Analysts expect the Union government to achieve its fiscal deficit target for the year despite a slightly lower nominal GDP growth, compared to the budgeted 10.5%. A decline in capital expenditure from the budgeted level of Rs 11.1 lakh crore for the year is likely, given the 12.3% year on year contraction in such spending in April-November.
The Centre’s net tax revenue–after refunds and devolution to states–stood at Rs 14.43 lakh crore, accounting for 55.9% of the BE, during April-November. The growth during the period was merely 0.5% on year, which is significantly lower than 11% growth pegged in the BE. Non-tax revenue, on the other hand, stood at Rs 4.27 lakh crore, accounting for 78.3% of the BE.
The Centre’s total expenditure, meanwhile, stood at Rs 27.4 lakh crore, accounting for 56.9% of the BE. In April-November of FY24, the total expenditure accounted for 58.9% of the BE.
In the first eight months, capex stood at Rs 5.13 lakh crore. To achieve the Budget aim of Rs 11.1 lakh crore, capex in December-March will have to surge 65% on year or record a monthly run rate of Rs 1.5 trillion, which appears increasingly daunting, said Aditi Nayar, chief economist, Icra. Analysts expect the capex target to be missed by a margin of at least Rs. 1-1.5 lakh crore.
Meanwhile, gross corporate tax collections have declined by 1% on year in April-November, but income tax collections have grown by 24%. Experts expect the income tax collections to surpass the BE of Rs. 11.5 trillion, unless large refunds are released in the latter part of the fiscal.
The finance ministry has said that in the upcoming Budget for FY26, the Centre may peg a fiscal deficit of below 4.5% as a percentage of GDP. But economists as well as representatives of India Inc have urged the Centre to stick to the 4.5% aim, as any further contraction may hurt economic growth.
In H1FY25, GDP grew by 6%, with 5.4% growth in Q2, which prompted the Reserve Bank of India (RBI) to cut down its growth projection for the full fiscal year by 60 basis points to 6.6% from 7.2% earlier.