Centre’s fiscal deficit at 52.5% of BE between April and November, capex at 46.2% of annual target

The Centre’s fiscal deficit amounted to 52.5% of the full-year target between April and November 2024 with capital expenditure amounting to 46.2% of the Budget estimate of Rs 11.1 lakh crore. While the data released on Tuesday gives expectation to an improvement in the Centre’s fiscal performance, there remain concerns that the capex target for FY25 may be missed.
 
As per official data, the Centre’s fiscal deficit amounted to Rs 8.5 lakh crore or 52.5% of the Budget target of Rs 16.13 lakh crore by November end 2024. This was 6.6% lower than the Rs 9.1 lakh crore fiscal deficit recorded in November 2023.
 
The Centre’s total receipts amounted to Rs 18.94 lakh crore between April and November 2024, which was 59.1% of the Budget estimates for the fiscal. Of this tax revenue (net to Centre) stood at Rs 14.43 lakh crore and non tax revenue was Rs 4.27 lakh crore in the period. Non debt capital receipts amounted to Rs 23,953 crore between April and November this fiscal.
 
The total expenditure incurred by the Centre was Rs 27.41 lakh crore, amounting to 56.9% of the BE. Of this, Rs 22.27 lakh crore was revenue expenditure while Rs 5.13 lakh capital expenditure.
 
Aditi Nayar, Chief Economist and Head - Research & Outreach, ICRA noted that capital expenditure displayed a healthy 21% expansion, albeit on a modest base. However, the Centre’s capex needs to expand by 65% year on year in December 2024 to March 2025 or record a monthly run rate of Rs. 1.5 lakh crore, to meet the FY2025 BE, which appears increasingly daunting, she said. “We are apprehensive that the capex target of Rs. 11.1 lakh crore for FY2025 will be missed by a margin of at least Rs 1 lakh crore to Rs 1.5 lakh crore,” she further said.
 
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. Accordingly, ICRA expects the fiscal deficit to mildly trail the FY2025 BE of Rs. 16.1 lakh crore or 4.9% of GDP.