Data Alert
Fiscal deficit worsens sharply Apr-Oct, at 46.5% of FY25 target
This story was originally published at 18:48 IST on 29 November 2024
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--Govt Apr-Oct fiscal deficit 46.5% of INR 16.133 tln target for FY25
--Govt Apr-Oct fiscal deficit INR 7.508 tln vs INR 8.037 tln year ago
--Govt Apr-Oct total expenditure INR 24.739 tln vs INR 23.944 tln year ago
--Govt Apr-Oct total receipts INR 17.231 tln vs INR 15.907 tln year ago
--Govt Apr-Oct capital expenditure INR 4.665 tln vs INR 5.469 tln year ago
--Govt Apr-Oct gross tax revenue INR 20.326 tln vs INR 18.345 tln year ago
--Govt: Apr-Oct tax devolution to states INR 7.23 tln vs INR 5.28 tln yr ago
--Govt Oct fiscal deficit INR 2.763 tln vs INR 1.018 tln year ago
--Govt Oct total expenditure INR 3.624 tln vs INR 2.753 tln year ago
--Govt Oct total receipts INR 861 bln vs INR 1.734 tln year ago
--Govt Oct capital expenditure INR 516 bln vs INR 563 bln year ago
--Govt Oct gross tax revenue INR 2.188 tln vs INR 2.152 tln year ago
NEW DELHI - The Indian government's fiscal deficit in the first seven months of 2024-25 (Apr-Mar) was at INR 7.508 trillion, down 6.6% on year, data released by the Controller General of Accounts Friday showed. The fiscal deficit for Apr-Oct accounted for 46.5% of the full-year target of INR 16.133 trillion set in the Union Budget for FY25, higher than 45.0% in the corresponding period of FY24 and sharply higher than 29.4% in the first half of the current financial year.
The central government has set itself a fiscal deficit target of 4.9% of GDP for FY25, down from the 5.6% it achieved last year, as part of its medium-term roadmap of reducing the deficit to below 4.5% by FY26.
The sharp expansion in the fiscal deficit in Apr-Oct occurred on the back of a near-tripling of the deficit in October, which rose 171% on year to INR 2.763 trillion as total revenue during the month crashed to just half of what it was in the same period last year, even as expenditure jumped 32%.
In October, the Centre's total receipts were 50% lower on year at INR 861 billion, with net tax revenue falling 72% to INR 398 billion, although non-tax revenue rose 45% to INR 421 billion. The huge reduction in the net tax revenue of the Centre was due to tax devolution to states in October being sharply higher at INR 1.782 trillion compared to INR 730 billion last year. However, even if not for the higher transfer of funds to states last month, gross tax revenue rose rather slowly in October, posting an increase of only 1.6% on year to INR 2.188 trillion.
For Apr-Oct as a whole, net tax revenue is just 0.2% higher from last year, with total receipts up 8.3% thanks to non-tax revenue being 50% higher.
On the spending front, October saw an 8?cline in capital expenditure to INR 516 billion, although total spending rose 32% to INR 3.624 trillion as revenue expenditure jumped 42% on year. For the first seven months of FY25, capital expenditure is now 15% lower compared to last year, making the achievement of the full-year target of INR 11.11 trillion a tall task. So far this year, the government has only spent 42.0% of its full-year capital expenditure target, down from 54.7% in Apr-Oct 2023.
To meet the FY25 Budget estimate, the government needs to incur a capital expenditure of around INR 1.289 trillion per month during the final five months of the year. Economists widely expect the government to miss its capex target.
The Controller General of Accounts detailed the government's accounts for October and Apr-Oct as follows (in billion rupees):
| October | September | October | Year-on-year change | |
| 2024 | 2024 | 2023 | ||
| Revenue receipts | 818.94 | 4,140.61 | 1,706.10 | (-)52.0% |
| Net tax revenue | 398.14 | 3,913.14 | 1,416.17 | (-)71.9% |
| Non-tax revenue | 420.80 | 227.47 | 289.93 | 45.1% |
| Other receipts | 23.65 | 23.47 | 10.50 | 125.2% |
| Total receipts | 861.00 | 4,197.96 | 1,734.34 | (-)50.4% |
| Revenue expenditure | 3,108.25 | 3,451.61 | 2,189.77 | 41.9% |
| Capital expenditure | 515.79 | 1,139.79 | 562.96 | (-)8.4% |
| Total expenditure | 3,624.04 | 4,591.40 | 2,752.73 | 31.7% |
| Fiscal deficit | 2,763.04 | 393.44 | 1,018.39 | 171.3% |
| Apr-Oct | Apr-Oct | Year-on-year change | Budget estimates | % of actuals to Budget estimates | ||
| 2024-25 | 2023-24 | 2024-25 | 2023-24 | |||
| Revenue receipts | 17,042.67 | 15,677.22 | 8.7% | 31,292.00 | 54.5% | 59.6% |
| Net tax revenue | 13,049.73 | 13,019.57 | 0.2% | 25,834.99 | 50.5% | 55.9% |
| Non-tax revenue | 3,992.94 | 2,657.65 | 50.2% | 5,457.01 | 73.2% | 88.1% |
| Other receipts | 55.32 | 80.00 | (-)30.9% | 500.00 | 11.1% | 13.1% |
| Total receipts | 17,230.74 | 15,907.12 | 8.3% | 32,072.00 | 53.7% | 58.6% |
| Revenue expenditure | 20,073.53 | 18,474.88 | 8.7% | 37,094.01 | 54.1% | 52.7% |
| Capital expenditure | 4,665.45 | 5,469.24 | (-)14.7% | 11,111.11 | 42.0% | 54.7% |
| Total expenditure | 24,738.98 | 23,944.12 | 3.3% | 48,205.12 | 51.3% | 53.2% |
| Fiscal deficit | 7,508.24 | 8,037.00 | (-)6.6% | 16,133.12 | 46.5% | 45.0% |
End
Reported by Siddharth Upasani
Edited by Tanima Banerjee
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