Thanks to lower expenditure and record transfer from RBI. Lower expenditure because of Model Code of Conduct and record transfer from the Reserve Bank of India helped restricting fiscal deficit to low of around 8% of the Budget Estimate during April-June quarter of Fiscal Year 2024-25, data released by the Controller General of Accounts (CGA) showed. The figure was over 25 per cent of revised estimate during the corresponding period of the last fiscal. Fiscal deficit is the difference between expenditure and income of the Government. Experts feel it would be challenging to exhaust capital expenditure according to the Budget during the remaining period of the fiscal. The Government has lowered the estimate of fiscal deficit to 4.9% from 5.1% during FY25. However, there is no change in the capital expenditure estimate of ₹11.11 lakh crores, as prescribed in the interim Budget.
In absolute terms, fiscal deficit was ₹1,35,712 crores as of June-end. Unveiling the revenue-expenditure data of the Union Government for the first three months of 2024-25, CGA said the net tax revenue was over ₹5.49 lakh crores or 21.1% of the BE for the current fiscal. The net tax revenue collection was 18.6% at end-June 2023. The Central Government’s total expenditure in the first quarter stood over ₹9.69 lakh crores or 20.4 per cent of BE. The expenditure had just crossed 23% of the BE in the year-ago period. According to Aditi Nayar, Chief Economist with ICRA, the high year-on-year growth in corporate taxes in the first quarter was led by a low base; as compared to corresponding quarter of the last fiscal. Corporate tax collections are higher by a relatively moderate 8.7% during the quarter under consideration.
Capex
Capital expenditure during the first quarter was around 35% lower than last fiscal. “To meet the FY 2025 BE, ₹9.3 lakh crores of capex need to be incurred in the last three quarters of the year, a growth of 39% relative to the same period of FY 2024 (₹ 6.7 lakh crores), which appears quite challenging,” Nayar said. The headroom of ₹29.2 lakh crores left for revenue spending in July-March FY 2025 is 7% higher than the expenditure of ₹27.2 lakh crores recorded in the year-ago period. In Q1 FY 2025, the Centre’s indirect taxes grew by 8%, whereas subsidies rose by 3.6% which suggests that the wedge between the GDP and GVA growth would be mild in this quarter, she said.
