The centre’s fiscal deficit stood at 52.5% of BE between April and November, and capital expenditure is at 46.2% of annual target.

The Centre’s fiscal deficit stood at 52.5% of the full-year target between April and November 2024 with capital expenditure reaching 46.2% of the budget estimate of Rs 11.1 lakh crore. While the data released on Tuesday gives expectations of improved financial performance of the centre, there are still concerns that the capital expenditure target for FY25 may not be met.

According to official data, the Centre’s fiscal deficit stood at Rs 8.5 lakh crore or 52.5% of the budget target of Rs 16.13 lakh crore by the end of November 2024. This was 6.6% lower than the fiscal deficit of Rs 9.1 lakh crore recorded in November 2023.

The Centre’s total receipts stood at Rs 18.94 lakh crore between April and November 2024, which is 59.1% of the budget estimate for the financial year. Of this, tax revenue (net position) amounted to Rs 14.43 lakh crore, and non-tax revenue amounted to Rs 4.27 lakh crore in this period. Non-debt capital receipts stood at Rs 23,953 crore between April and November this financial year.

The total expenditure incurred by the Center was Rs 27.41 lakh crore, equivalent to 56.9% of the balance sheet. Of this, Rs 22.27 lakh crore was revenue expenditure while Rs 5.13 lakh was capital expenditure.

Aditi Nayar, chief economist and head of research and outreach at ICRA, noted that capital spending showed a healthy 21% expansion, albeit on a modest base. However, the center’s capex needs to expand by 65% ​​year-on-year in December 2024 to March 2025 or register a monthly run rate of Rs. She said: Rs 1.5 thousand crore, to meet the financial plan for the year 2025, which appears increasingly daunting. “We fear the capex target is Rs. 11.1 lakh crore will be missed for FY25 by a margin of at least Rs 1 lakh to Rs 1.5 lakh crore,” she added.

The expected failure to meet the capital expenditure target is expected to offset any shortfalls due to divestment and taxes, as well as the impact of the recent supplemental demand for grants. Accordingly, ICRA expects the fiscal deficit to lag slightly behind the FY25 BE of Rs 1,000. 16.1 million crore or 4.9% of GDP.