India's fiscal deficit estimated at 5.8% of GDP in FY24: ICRA

The general government’s gross market borrowings are expected to grow to ₹24.4 trillion in FY24, compared to ₹22.1 trillion in FY23.

Aided by robust direct tax collections and GST inflows, ICRA expects the Gori’s net tax receipts to overshoot the budgeted amount by a healthy ₹2.1 trillion in FY23. This, combined with expenditure savings to the tune of approximately ₹1 trillion along the lines seen over the last 5-6 years on an average, are expected to partly offset the sizeable net cash outgo announced in the First Supplementary Demand for Grants and the shortfall in non-tax revenues and disinvestment receipts. Consequently, ICRA expects the GoI’s fiscal deficit to print at ₹17.5 trillion in FY23, exceeding the budgeted amount of ₹16.6 trillion. However, a larger-than-estimated GDP would allow the fiscal deficit to remain at the budgeted target of 6.4 per cent of GDP.

ICRA estimates the GoI’s gross tax revenues (GTR) in FY24 at ₹34 trillion, a YoY expansion of 9.4 per cent (over projected level for FY23), with growth in direct taxes likely to outpace that in indirect taxes.

The ratings agency projects the GoI to target a double-digit growth in capital expenditure to approximately ₹8.5-9 trillion in FY24, relative to the level of ₹7.5 trillion, expected in FY23. In contrast, revenue spending is expected to rise by a relatively muted approximately 3 per cent.

GoI is expected to place its net market borrowings in FY24 at ₹10.4 trillion, lower than ₹10.9 trillion in FY23. The total centre and state net dated market borrowings are estimated to rise to ₹17.2 trillion in FY24 from ₹16.5 trillion in FY23.

Fibre2Fashion News Desk (DP)