In absolute terms, fiscal deficit was at ₹8.5 lakh crore in the first eight months of this fiscal, lower than ₹9.1 lakh crore a year ago.
While capital expenditure revived, it accounted for 46.2% of the annual target of ₹11.1 lakh crore, down from 58.5% in the same period last year. Capex contracted by 12.3% year-on-year to ₹1 lakh crore, largely due to general election in the June quarter and an extended monsoon season this year.
To meet the 2024-25 capex target, expenditure would need to grow by 65% in the remaining four months. “The capex target will be missed by a margin of at least ₹1-1.5 trillion,” said Aditi Nayar, chief economist at credit rating agency ICRA.
The anticipated miss in the capex target is expected to offset any shortfall on account of disinvestment and taxes, as well as impact of the recent supplementary demand for grants, she added.Total expenditure grew by 3.3% year-on-year to ₹27.4 lakh crore during April to November, reaching 56.9% of the annual estimates.Total receipts, on the other hand, rose by 8.5% to ₹18.9 lakh crore, achieving 59.1% of the budget estimates.
Ahead of the 2025-26 Budget, industry associations sought higher capital expenditure and reduced tax rates during a meeting with finance minister Nirmala Sitharaman on December 30.
The government’s major subsidy payouts for food, fertilisers, and fuels reached 73% of the budget estimates in the eight months of this fiscal compared to 65% a year ago.
ICRA forecasts that the fiscal deficit will fall slightly short of the 4.9% target.
