Quick Summary
India's fiscal deficit for the financial year 2024-25 is projected to be 4.75% of the gross domestic product (GDP), 19 basis points (bps) lower than the budget estimate of 4.9%, according to India Ratings and Research (Ind-Ra). The projection aligns with the central government's commitment to fiscal consolidation, targeting a fiscal deficit below 4.5% by 2025-26, as announced by Finance Minister Nirmala Sitharaman during her July Budget speech. Economic Activity and Fiscal Consolidation Ind-
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FAQ :
India's fiscal deficit for FY25 is projected to be 4.75% of GDP, according to India Ratings and Research (Ind-Ra).
Yes, the projected 4.75% is 19 basis points lower than the budget estimate of 4.9%.
The central government is targeting a fiscal deficit below 4.5% by the financial year 2025-26.
Strong performance in gross and net tax revenues, particularly income tax and corporate tax, is a major contributor. Disciplined spending also plays a role.
Ind-Ra noted potential challenges from underperformance in non-tax revenue and disinvestment targets.
Capital expenditure is expected to grow by 10.6% year-on-year, reaching Rs 10.49 lakh crore, though this is a slower growth than initially budgeted.
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