India’s fiscal deficit for the first eight months of the financial year (April-November 2024) stood at ₹8.47 trillion ($98.9 billion), accounting for 52.5% of the full-year target, according to data released by the government on Tuesday.
Key Highlights:
- Tax Revenue:
- Net tax receipts amounted to ₹14.43 trillion, or 56% of the annual target, compared to ₹14.36 trillion in the same period last year.
- Government Expenditure:
- Total expenditure during April-November was ₹27.41 trillion, representing 57% of the yearly goal.
- This is a slight increase from ₹26.52 trillion spent in the corresponding period last year.
- Capital Expenditure:
- Capital expenditure, crucial for infrastructure development, reached ₹5.13 trillion, or 46.2% of the annual target, down from ₹5.86 trillion for the same period last year.
- Slower spending has been attributed to the focus on national elections, potentially leading to a shortfall in the annual capital expenditure target.
Implications:
Economists predict that India might achieve a narrower fiscal deficit than the budgeted 4.9% of GDP for FY25, driven by lower-than-expected spending. However, this could come at the cost of slower infrastructure development due to the reduced pace of capital expenditure.
Exchange Rate:
At the time of reporting, $1 was equivalent to ₹85.6450.
