Morgan Stanley has provided an update on India’s fiscal deficit, highlighting stable performance and noteworthy trends in government finances during November 2024.
Key Highlights
- Fiscal Deficit Stability:
The 12-month trailing deficit remained steady at 5.1% of GDP in November 2024 for the second consecutive month, showcasing fiscal discipline despite economic challenges. - Expenditure Trends:
- Total expenditure growth moderated to 3.6% YoY in November, compared to 31.7% in October, signaling controlled spending.
- Revenue spending softened to 0.5% YoY, while capital expenditure (capex) surged to a four-month high of 21.3% YoY, reflecting the government’s focus on infrastructure development.
- Fiscal Year-to-Date (FYTD) Overview:
On a FYTD basis, total expenditure growth was steady at 3.3% YoY, indicating balanced fiscal management. - Revenue Growth:
Total receipts grew by 10.6% YoY in November, marking the highest growth since July. This was driven by a broad-based uptick in revenues, offering strong support to fiscal metrics. - Government Cash Surplus:
The cash surplus declined in November compared to October, reflecting a rise in expenditures during the month.
Morgan Stanley’s report underscores that India’s fiscal metrics are progressing in line with expectations, supported by steady revenue collection and targeted spending on capital projects. However, fiscal discipline will remain key as revenue spending slows and capex gains momentum.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making investment decisions.
