In the first two months of 2024-25, the Centre’s fiscal deficit stood at ₹50,000 crore or just 3% of the full-year figure penned into the Interim Budget, with receipts hitting 18.6% of the target bolstered by the record ₹2.1 lakh crore transfer from the central bank in May.
In contrast, expenditure touched just 13.1% of the projection for this year thanks to a slowdown in capital expenditure which stood at 12.9% of the annual target compared with 16.8% by the end of May 2023. Of the total expenditure of ₹6.23 lakh crore by May, ₹1.43 lakh crore was on the capital account, the Finance Ministry said.
Economists reckoned these numbers create space for the Centre to pursue greater fiscal consolidation this year than the 5.1% of GDP target set in the Interim Budget. “The revenue upside seen from non-tax revenue, and to a smaller extent, tax receipts, suggests headroom to both boost expenditure and target a faster fiscal consolidation,” ICRA chief economist Aditi Nayar said.
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