December 31st 2024.
The recent data released by the Controller General of Accounts has revealed that the Centre's fiscal deficit for the eighth month of the financial year 2024-25 has reached 52.5% of the total target. This means that the government's expenses have exceeded its revenue by about Rs 8.47 lakh crore in the period between April and November.
The government had aimed to bring down the fiscal deficit to 4.9% of the gross domestic product (GDP) in the current financial year, as stated in the Union Budget. This is a decrease from the previous fiscal year, where the deficit was 5.6% of the GDP. In terms of absolute numbers, the government's goal is to keep the fiscal deficit at Rs 16,13,312 crore for the current fiscal.
The data also shows that the government's total expenditure in the first eight months of 2024-25 was Rs 27.47 lakh crore, which is about 56.9% of the budget estimate. Out of this, Rs 22.27 lakh crore was spent on revenue account and Rs 5.13 lakh crore on the capital account. A significant portion of the revenue expenditure, about Rs 6,58,494 crore, was used for interest payments, while Rs 2,79,211 crore was spent on major subsidies.
For those unfamiliar with the term, fiscal deficit refers to the difference between the government's total expenses and revenue. It is an indication of how much the government needs to borrow in order to cover its expenses. This data is important as it gives us an idea of the country's financial health and the government's borrowing needs.
According to Icra Chief Economist Aditi Nayar, the government is expected to miss its capex (capital expenditure) target, which will offset any shortfall in disinvestment and taxes. This, along with the impact of the recent supplementary demand for grants, is likely to result in a slight deviation from the estimated fiscal deficit of Rs 16.1 lakh crore or 4.9% of the GDP for the current financial year.
In simpler terms, this means that the government may not be able to stick to its budgeted plan of keeping the fiscal deficit within a certain limit, due to various factors such as lower-than-expected investment in capital projects and the need for additional funds for certain grants. However, the overall impact is expected to be minimal and the fiscal deficit is still projected to stay within a manageable range.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
[Generative AI is experimental.]
