Budget 2024: All about fiscal deficit
The fiscal deficit signifies the difference between the government’s income and expenditure. It stands as a pivotal metric with implications for borrowing and financial commitments. Minister of State for Finance Bhagwat Karad has expressed confidence in meeting the fiscal deficit target of 5.9 percent of GDP for the fiscal year 2023-24.
India’s fiscal deficit stood at Rs 16.54 lakh crore in FY24, compared to the budgetary target of Rs 17.86 lakh crore, reaching 95.3 percent of the target, according to the Comptroller General of Accounts. The central government’s fiscal deficit was 5.6 percent of GDP, below the revised estimate of 5.8 percent.
Net tax receipts for FY24 were 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.
In April, the fiscal deficit was Rs 2.1 lakh crore, or 12.5 percent of the full-year target.
The central government’s fiscal deficit in the first two months of FY25 narrowed to 3% of the annual target, compared with 11.8% a year before, as revenue mop-up rose on the back of a generous central bank dividend in May while expenditure eased, substantially erasing the April gap.
The deficit was to the tune of 12.5% of the full-year target in April, against 7.5% a year before.
According to analysts, the improved performance in May keeps the government firmly on course to realise its target of containing the fiscal gap at 5.1% of GDP in FY25.
The govt aims to reduce the gap further to 4.5% of GDP in FY26. The official data released on Friday showed, in absolute terms, the fiscal deficit between April and May stood at just Rs 50,615 crore, compared with Rs 2,10,287 crore a year before. In May alone, the government witnessed a rare fiscal surplus of Rs 1.6 lakh crore, driven by a record Rs 2.11 lakh crore central bank dividend and a compression in both capital and revenue spending amid the general election.
