Ahead of the Interim Budget for FY25, the fiscal deficit touched 55 per cent (Rs 9.8 trillion) of the full-year target for the April-December period of FY24, data by the Controller General of Accounts (CGA) on Wednesday showed.

       The fiscal deficit was marginally lower at Rs 9.9 trillion, recorded during the corresponding period last year.

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       It was 59.8 per cent of the full-year target. The government is aiming to bring down the fiscal deficit to 5.9 per cent of the gross domestic product (GDP) by the end of this financial year from 6.4 per cent last year. The target for FY26 is 4.5 per cent of GDP.

       The total revenue receipts for the first three quarters of FY24 were 77.6 per cent of the target. This is against 80.3 per cent for the corresponding period last year, according to the data. The tax revenue reached 74.2 per cent of the Budget estimate (BE) compared to 80.4 per cent last year.

       “ICRA does not expect the fiscal deficit target of Rs 17.9 trillion for FY24 to be breached. However, a lower nominal GDP than what the Union Budget had pencilled in, could result in the fiscal deficit printing at 6 per cent of GDP,” said Aditi Nayar, chief economist, ICRA.

       The government’s capital expenditure for the April-December period of FY24 stood at 67.3 per cent of the target with the third quarter seeing an expansion of 24 per cent in capex. In December 2023, capex more than doubled on a year-on-year (Y-o-Y) basis to Rs 880 billion, offsetting the outturn in the previous two months.

       The government needs to incur around Rs 3.3 trillion in the fourth quarter to meet the full-year target for capex. Nayar added that ICRA expects the capex to undershoot the FY24 BE by Rs 0.75 trillion.

       This still implies a robust Y-o-Y growth of 26 per cent.

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       The Centre’s revenue expenditure stood at 68 per cent of the BE in April-December FY24 against 72.9 per cent last year.

       Experts said the revenue expenditure is likely to mildly overshoot the FY24 BE. This is on account of major subsidies and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

       The central tax devolution to states rose to Rs 7.5 trillion during April-December 2023. This is 22.6 per cent higher than Rs 6.1 trillion transferred during April-December 2022.