Fiscal deficit of the Center at 52.5% of BE between April and November, capex at 46.2% of the annual objective

The Centre’s fiscal deficit was 52.5% of the total target for the year between April and November 2024 with capital expenditure amounting to 46.2% of the budget estimate of Rs 11.1 lakh crore. While the data released on Tuesday gives hope of an improvement in the Centre’s fiscal performance, concerns remain that the capex target for FY25 may be missed.

According to official data, the fiscal deficit of the Center amounted to Rs 8.5 lakh crore or 52.5% of the budget target of Rs 16.13 lakh crore at the end of November 2024. It was 6.6% lower than the fiscal deficit of Rs 9.1 lakh crore registered in November 2023.

The Centre’s total receipts amounted to Rs 18.94 lakh crore between April and November 2024, which was 59.1% of the budget estimates for the fiscal. Of this tax revenue (net to the Centre) was Rs 14.43 lakh crore and non-tax revenue was Rs 4.27 lakh crore in the period. Non-debt capital receipts amounted to Rs 23,953 crore between April and November this fiscal.

The total expenditure of the Center was Rs 27.41 lakh crore, which amounts to 56.9% of the BE. Of this, Rs 22.27 lakh crore was revenue expenditure while Rs 5.13 lakh capital expenditure.

Aditi Nayar, Chief Economist and Head – Research & Outreach, ICRA noted that capital expenditure showed a healthy expansion of 21%, albeit on a modest base. However, the Centre’s capex must expand by 65% ​​annually in December from December 2024 to March 2025 or register a monthly run rate of Rs. 1.5 lakh crore, to meet the FY2025 BE, which is looking increasingly daunting, he said. “We are apprehensive that the capex target of Rs. 11.1 lakh crore for FY2025 will be missed by a margin of at least Rs 1 lakh crore to Rs 1.5 lakh crore,” he further said.

The anticipated shortfall in the capex target is expected to compensate for any shortfall due to disinvestment and taxes, as well as the impact of the recent additional request for grants. Consequently, ICRA expects the fiscal deficit to slightly trail the FY2025 BE of Rs. 16.1 lakh crore or 4.9% of GDP.