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Informist, Tuesday, Jul 23, 2024

--Moody's: Higher gross GST mop-up to drive revenue growth FY25 

--Moody's: Higher direct tax mop-up to drive revenue growth FY25 

--Moody's: Govt's capital spending on infra shows policy continuity 

--CONTEXT: Moody's comments on India's FY25 Union Budget 

--Moody's: Budget credit positive as FY25 fisc gap aim seen 4.9% of GDP 

--Moody's: See general govt debt stabilising above 80% of GDP over 3 yrs

MUMBAI – Moody's Ratings today said that India's Budget for 2024-25 (Apr-Mar) is credit positive as the government's fiscal deficit is pegged at 4.9% of GDP for the financial year, lower than the 5.1% announced in the interim budget. The goal of reaching a fiscal deficit 4.5% of GDP by 2025-26 (Apr-Mar) is possible, the rating agency said. 

"Higher gross GST (goods and services tax) and direct tax collections are expected to drive revenue growth in the ongoing fiscal year," the rating agency added. GST mop-up for this financial year is seen at 10.62 trln rupees, as mentioned in the Budget.

The rating agency added that the general Indian government debt could stabilise above 80% of GDP over the next three years, given the latest Budget estimates. This is lower than 89.3% in 2020-21 (Apr-Mar).

The rating agency said that the surplus transfer by the Reserve Bank of India provided more room on the fiscal front. The RBI transferred a surplus amount of 2.11 trln rupees to the government for the previous financial year. The rating agency also said that the capital spending of the government on infrastructure reflects policy continuity.   End

Reported by M.C. Adhiinthran

Edited by Vandana Hingorani

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