Fiscal Deficit on Track Amid Economic Adjustments

The fiscal deficit for the first seven months of FY 2024-25 touched 46.5% of the annual target, amounting to Rs 7,50,824 crore. Government aims to reduce it to 4.9% of GDP. Aditi Nayar from ICRA noted reasons including RBI's dividend and capital expenditure contraction.

The first seven months of the financial year 2024-25 saw India's fiscal deficit reach 46.5% of its full-year aim, government statistics revealed on Friday. The deficit amounted to Rs 7,50,824 crore from April to October, according to the Controller General of Accounts.

In this period, the fiscal deficit stood at 45% of the Budget Estimates for 2023-24. The government aims to reduce the fiscal deficit to 4.9% of GDP in the 2024-25 fiscal year, down from 5.6% in the previous year.

Aditi Nayar, Chief Economist at ICRA, stated that the fiscal deficit reduction to Rs 7.5 lakh crore resulted from factors like RBI's dividend and a decrease in capital expenditure. An increase in revenue expenditure in October 2024 contributed to a rise in that month's fiscal deficit.

(With inputs from agencies.)