India’s fiscal deficit for the first nine months of the current fiscal year stood at Rs 9.14 lakh crore, or 56.7 per cent on the annual estimates, data released by Controller General of Accounts (CGA) showed on Friday. The fiscal deficit widened from 55 per cent in the comparable year- earlier period.
Total receipts for the period stood at Rs 23.18 lakh crore, while overall expenditure in April to December was at Rs 32.32 lakh crore. Per government data, they were 72.3 per cent and 67 per cent of this fiscal year’s budget target. While total receipts in the year-earlier period was at 76.3 per cent of estimate, expenditure narrowed from 67.8 per cent a year earlier.
Revenue receipts were recorded at Rs 22.91 lakh crore, of which tax revenue was Rs 18.43 lakh crore and non-tax revenue was Rs 4.48 lakh crore. Tax and non-tax revenues were 71.3 per cent and 82 per cent of the budgeted estimate, narrowed from 74.2 per cent and 103.5 per cent of budget forecast in the same period last year.
Net tax receipts for April to December stood at Rs 18.43 lakh crore, or 71.3 per cent of the full year target, up from Rs 17.3 lakh crore in the year-earlier period.
The spending in the current financial year has been slow due to elections and capital expenditure is likely to fall short of the annual target.
Aditi Nayar, Chief Economist, Head – Research & Outreach, ICRA Limited, said, “Gross tax collections rose by 11 per cent on a YoY basis in 9M FY2025, aided by elevated growth in income tax collections. While corporate tax collections have been tepid, rising by just 3 per cent YoY in April-December FY2025, income tax collections have expanded by 22 per cent during this period. ICRA believes that income tax collections may surpass the FY2025 RBE of Rs 11.5 trillion, unless large refunds are released in the latter part of the fiscal, while corporation tax inflows may print in line or slightly lower than the target.”
“Revenue expenditure rose by a mild 1.7 per cent YoY in the month of December 2024, whereas capital expenditure surged by ~95 per cent in the month, which would augur well for economic activity. The GoI’s capex still needs to expand by a sharp ~55 per cent YoY in January-March 2025 or record a monthly run rate of Rs 1.4 trillion, to meet the FY2025 RBE, which appears challenging. We are apprehensive that the capex target of Rs 11.1 trillion for FY2025 will be missed by a margin of ~Rs 0.8-1.0 trillion, although this is lower than our earlier estimate of a Rs 1.4 trillion miss, owing to the unexpectedly robust spike in December 2024,” she added.
Aditi Nayar further maintained that the anticipated miss in the capex target is expected to offset any shortfall on account of disinvestment and taxes, as well as the impact of the recent supplementary demand for grants. Accordingly, ICRA said that the fiscal deficit is expected to mildly trail the FY2025 RBE of Rs 16.1 trillion or 4.9 per cent of GDP.