India may record a fiscal deficit in FY25 of 4.7% to 4.8% of GDP, according to a Mint report by Reuters.

(Reuters) – India may post a fiscal deficit for the current fiscal year of 4.7% to 4.8% of GDP, lower than the government’s estimate of 4.9%, driven primarily by lower spending, financial daily Mint reported on Monday. .

Lower spending on planned capital investments and higher-than-expected dividends from the central bank could lead to a smaller fiscal deficit, the report said, citing two people familiar with the matter.

The newspaper reported, citing a source, that the plan for the fiscal year 2026 aims to keep the budget deficit within the government’s target of 4.5%.

India’s budget deficit reached 5.6% of GDP in the fiscal year 2023-2024. Its fiscal year extends from April to March.

The Indian Finance Ministry did not immediately respond to a Reuters request for comment.

As of November, government capital spending, or spending on building physical infrastructure, was 5.13 trillion rupiah ($59.41 billion), or 46.2% of the annual target, compared to 5.86 trillion rupiah for the same period a year earlier.

Spending in the current fiscal year has been slow due to the national elections and capital expenditure is likely to be below the annual target.

Much higher-than-expected dividend payout of Rs2.11 trillion from reserve Bank of India (NS:), which was announced last May and will be calculated in fiscal year 2025, will also help reduce the deficit, the report said.

($1 = 86.3310 Indian rupees)