India's fiscal deficit hits 52.5% of FY25 target by Nov-end

The government's fiscal deficit hit 52.5% of the budget estimate as of the April-November period of the fiscal year ending March 31, 2025, the Controller General of Accounts (CGA) data shows. During the same period last year, the government's fiscal deficit -- the difference between the government’s revenue and expenditure -- came in at ₹17.86 lakh crore.

The gap between expenditure and revenue stood at ₹8.46 lakh crore during April-November 2024 compared to the set target of ₹16.13 lakh crore for FY 2024-25. The net tax receipts for the eight months of the fiscal year stood at ₹14.43 lakh, around 56% of the budget estimate, compared to ₹14.36 lakh crore during the same period last year.

Overall government expenditure stood at ₹27.41 lakh crore during April-November 2024, around 57% of the annual target, compared to ₹26.52 lakh crore expense in the same period in FY24. The government's CAPEX stood at ₹5.13 lakh crore in the said period, around 46.2% of the annual target, against ₹8.86 lakh crore in the same period last year.

"Gross tax collections rose by 10% on a YoY basis in November 2024. While corporate tax collections have been tepid, falling by 1% YoY in April-November FY2025, income tax collections have expanded by a 24% during this period, although these trends may have been partly distorted by the timing of refunds. ICRA believes that income tax collections may surpass the FY2025 RBE of Rs. 11.5 lakh crore, unless large refunds are released in the latter part of the fiscal, while corporation tax inflows may print in line or slightly lower than the target," says Aditi Nayar, Chief Economist and Head - Research & Outreach, ICRA.

Nayar says the anticipated miss in the capex target is expected to offset any shortfall on account of disinvestment and taxes, as well as the impact of the recent supplementary demand for grants. "ICRA expects the fiscal deficit to mildly trail the FY2025 RBE of Rs. 16.1 trillion or 4.9% of GDP."

India’s fiscal deficit in the first seven months of the ongoing financial year stood at ₹7.5 lakh crore or 46.5% of the full-year target.

Union Finance Minister Nirmala Sitharaman during the 2024 Budget announcement had proposed a revision in the fiscal deficit target by 20 basis points to 4.9% of GDP for FY2024-25. Additionally, for the year 2024-25, the total receipts other than borrowings and the total expenditure were estimated at ₹32.07 lakh crore and ₹48.21 lakh crore, respectively. The net tax receipts were estimated at ₹25.83 lakh crore.