June 28th 2024.
The Indian government in New Delhi has announced that their fiscal deficit at the end of May 2024-25 was only at 3% of the annual estimates. This is a significant decrease from the previous financial year, which saw a fiscal deficit of 11.8% in the first two months. It should be noted that during this time, the model code of conduct was in place due to the Lok Sabha elections.
For the current financial year, the government has projected a fiscal deficit of 5.1% of the GDP, which amounts to Rs 16,85,494 crore. The Controller General of Accounts has released data stating that the fiscal deficit during April-May 2024 was Rs 50,615 crore, which accounts for 3% of the BE 2024-25. In the same period in the previous financial year, it was at 11.8% of the BE.
Net tax revenue for this year was recorded at Rs 3.19 lakh crore, which is 12.3% of the BE 2024-25. This is a slight increase from the previous year's corresponding period, which was at 11.9% of the BE 2023-24. The total expenditure at the end of May 2024 was recorded at Rs 6.23 lakh crore, which is 13.1% of the BE for this fiscal year. This is a decrease from the previous year, where it was at 13.9% of the BE.
It is worth noting that the government usually refrains from making new project expenditures when the Election Commission implements the model code of conduct. This is done to ensure a level playing field for all political parties during the elections.
The central government's fiscal deficit for 2023-24 at 5.6% of the GDP was better than the initial estimates of 5.8%. This was due to higher revenue realisation and lower expenditure. As per the Fiscal Responsibility & Budget Management Act, the government has set a goal to achieve a fiscal deficit of 4.5% in 2025-26. This shows the government's commitment to maintaining a healthy fiscal balance and ensuring the country's economic stability.
In conclusion, the government's efforts to manage the fiscal deficit have shown positive results in the first two months of the financial year. With a strong plan in place and a focus on responsible budget management, the Indian government aims to achieve their fiscal goals in the coming years. This will not only benefit the country's economy but also contribute to its overall growth and development.
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