Budget: Fiscal deficit is the difference between the govt’s income and expenditure. It is a key indicator that has implications for borrowing and financial commitments of the govt, which makes it a major news item before every budget. The central govt’s fiscal deficit stood at 46.5 per cent of its budget estimates in the first seven months (April-October) of the current financial year (FY2025).
The April-October fiscal deficit was at Rs 7.51 lakh crore — which is 46.5 per cent of the Budget Estimate (BE). During the corresponding period in the previous fiscal, it was at Rs 8.04 lakh crore (45.0 per cent of BE).
The capital expenditure of the govt in these seven months undershot estimates and was at a mere 42 per cent till October. Economists think it will be a challenge for the govt to spend the remaining 58 per cent in the remaining five months. This is a matter of importance, because capital expenditure is crucial for long-term economic growth.
In FY24, fiscal deficit stood at Rs 16.54 lakh crore, compared to the budgetary target of Rs 17.86 lakh crore, reaching 95.3 percent of the target. The central govt’s fiscal deficit was 5.6 per cent of GDP, below the revised estimate of 5.8 per cent.
The net direct tax collections for this fiscal year so far have recorded robust growth, rising by 16.45% year-on-year to over Rs 15.82 lakh crore, according to latest official data.
The gross direct tax collections, before refunds, saw a robust 20.32% growth year-on-year, rising from Rs 15.96 lakh crore in FY 2023-24 to Rs 19.21 crore. Refunds issued during this period were at Rs 3.38 lakh crore, an increase of 42.49%. All this marks a significantly favourable situation for govt finances at the moment.
For FY24, net tax receipts reached Rs 23.27 lakh crore, slightly exceeding the year’s target at 100.1 percent. Total expenditure amounted to Rs 44.43 lakh crore, or 99 percent of the target, with capital spending on infrastructure projects at Rs 9.49 lakh crore.
