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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 per cent of the Budget Estimate during April-June quarter of Fiscal Year 2024-25, data released by the Controller General of Accounts (CGA) on Wednesday 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 per cent from 5.1 per cent during FY25. However, there is no change in the capital expenditure estimate of ₹11.11 lakh crore, as prescribed in the interim Budget.
In absolute terms, fiscal deficit was ₹1,35,712 crore 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 crore or 21.1 per cent of the BE for the current fiscal. The net tax revenue collection was 18.6 per cent at end-June 2023. The Central government’s total expenditure in the first quarter stood over ₹9.69 lakh crore or 20.4 per cent of BE. The expenditure had just crossed 23 per cent 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 per cent during the quarter under consideration.
Capex
Capital expenditure during the first quarter was around 35 per cent lower than last fiscal. “To meet the FY2025 BE, ₹9.3 lakh crore of capex needs to be incurred in the last three quarters of the year, a growth of 39 per cent relative to the same period of FY2024 (₹ 6.7 lakh crore), which appears quite challenging,” Nayar said
The headroom of ₹29.2 lakh crore left for revenue spending in July-March FY2025 is 7 per cent higher than the expenditure of ₹27.2 lakh crore recorded in the year-ago period. In Q1 FY2025, the Centre’s indirect taxes grew by 8 per cent, whereas subsidies rose by 3.6 per cent which suggests that the wedge between the GDP and GVA growth would be mild in this quarter, she said.
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