The FY24 fiscal deficit has been revised down to 5.8 percent of the GDP, Finance Minister Nirmala Sitharaman said. Revised estimate of revenue receipts expected higher than budgeted, she added.
Revised estimate of revenue receipts expected higher than budgeted and the FY25 total receipts pegged at Rs 38.80 lakh crore, she said.
The fiscal deficit, representing the excess of the government’s total expenses over its total earnings, is a crucial indicator of economic health.
Most brokerages had anticipated the government to align with its budgeted fiscal deficit target of 5.9 percent.
Analysts from Jefferies and Morgan Stanley had estimated the fiscal deficit for the fiscal year 2025 (FY25) at 5.2 percent. In contrast, Nirmal Bang and BoB Capital Markets had anticipated a slightly higher figure of 5.5 percent.
Nirmal Bang analysts had expected fiscal consolidation in FY25, foreseeing a deficit of 5.5 percent of the GDP. They attribute this largely to a moderation in government capital expenditure growth at 15 percent. The analysts have outlined gross borrowings of Rs 15.2 lakh crore and net borrowing of Rs 11.6 lakh crore in their assessment.
However, Nirmal Bang had taken a more cautious stance, predicting some slippages and pegging the fiscal deficit at 6.1 percent. The varying estimates highlight the complexity of forecasting economic metrics amid dynamic market conditions.
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