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India's fiscal deficit likely to be 4.75% of GDP in FY25: IndRa

29 Nov '24

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India's fiscal deficit likely to be 4.75% of GDP in FY25: IndRa

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India Ratings and Research expects the country's fiscal deficit in FY25 to be 4.75 per cent—19 basis points lower than what was aimed in the budget—on the back of reduced expenditure.
The revenue expenditure, excluding subsidies, will be 0.12 per cent of GDP, lower than the budget estimate.
The government capital expenditure (capex) will still be 10.6 per cent higher than the FY24 figure.

India Ratings and Research (Ind-Ra) expects the country’s fiscal deficit in fiscal 2024-25 (FY25) to be 4.75 per cent—19 basis points (bps) lower than what was aimed in the budget—on the back of reduced expenditure.

In recent times, the union government has overachieved from its fiscal consolidation commitments made in the union budget. The domestic rating agency believes these would be the larger factors that may keep the fiscal deficit in FY25 lower than budgeted.

The revenue expenditure, excluding subsidies, will be 0.12 per cent of gross domestic product (GDP), lower than the budget estimate, the rating agency added.

Its chief economist and head of public finance Devendra Kumar Pant said the government capital expenditure will come out to be ₹62,000 crore lower than the estimate of ₹11.11 lakh crore.

The government capital expenditure (capex) will still be 10.6 per cent higher than the year-ago period, Pant said. The government was initially envisaging a 17.6 per cent growth in that number.

The capex to GDP in FY25 at 3.21 per cent is estimated to be at a two-decade high, the agency said in a note.

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