The government will be able to post a fiscal deficit of 4.75 percent in FY25, which is 0.19 percent below the budget target.
The rating agency added that revenue expenditure, excluding subsidies, would be 0.12 percent of GDP, lower than the budget estimate.
Domestic rating agency India Ratings and Research on Wednesday said the government will be able to register fiscal deficit at 4.75 percent in FY25, which is 0.19 percent below the budget target.
The rating agency added that revenue expenditure, excluding subsidies, would be 0.12 percent of GDP, lower than the budget estimate.
Its chief economist and head of public finance, Devendra Kumar Pant, said the government’s capital expenditure would be Rs 62,000 crore short of the estimated Rs 11.11 lakh crore.
Pant was quick to add that government investment would still be 10.6 percent higher than the year-ago period. The government was initially envisioning a 17.6 percent increase in the key figure.
While government capital expenditure is projected to decline, capex to GDP is projected at 3.21 percent in FY25, a two-decade high, the agency said.
“FY25 investment growth has been impacted by the general elections in May 2024, and capex shrank by 15.42% year-on-year in 1H FY25. To achieve the FY25 (BE) target, in 2H FY25 Capex should grow by 52.04 per cent, which looks like a tough task,” he added.
The agency said there would be a breach of its allocated capex for FY25 between the ministries, railways, and road, transport and highways.
Higher spending on food, fertilizer and petroleum subsidies will result in a shortfall of 0.10 percent of GDP on the subsidy front, the agency said, with overall spending 54.55 percent higher than budgeted levels in the first half. of finance.
On revenue expenditure, excluding subsidies, the rating agency’s report said the actual expenditure of 43 ministries, apart from civil aviation, railways, and road, transport and highways, was 40 per cent of their allocation in the April-September period. were less than
The report said that gross and net tax revenue in FY25 will come in at 12.02 percent of GDP and 8.08 percent of GDP respectively, which will be the highest level in 17 years, the report added. Tax and corporate tax share is estimated at 80.94 percent. 10.53 percent respectively in the additional gross tax revenue.
It said non-tax revenue and disinvestment receipts in FY25 are below the budgeted amount of Rs 5.46 lakh crore and Rs 78,000 crore respectively.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed. PTI)