India’s Fiscal Deficit for FY24: Government Data Analysis

Fitch Raises India's GDP Growth Forecast for FY25 to 7.2%

India’s fiscal deficit for FY24 improved to 5.6% of GDP, down from the Revised Estimates of 5.8%, owing to higher-than-expected tax receipts. The deficit stood at Rs 16.54 trillion against the budgetary target of Rs 17.86 trillion. Net tax receipts surpassed projections at Rs 23.27 trillion, while total expenditure reached Rs 44.43 trillion, constituting 99% of the budgeted amount.

Fiscal Deficit Overview

FY24 Performance: Fiscal deficit contained at 5.6% of GDP, lower than the Revised Estimates.
Tax Receipts: Net tax receipts exceeded projections at Rs 23.27 trillion.
Expenditure: Total expenditure stood at Rs 44.43 trillion, close to the budgeted amount.

FY25 Fiscal Targets

Target: The government aims for a fiscal deficit of 5.1% of GDP, or Rs 16.85 trillion, in FY25.
Long-Term Goal: Targeting a fiscal deficit of 4.5% of GDP by FY26.

Impact of RBI Dividend

Windfall: The RBI’s dividend provides additional leeway of Rs 1 trillion for enhanced expenditures or sharper fiscal consolidation.
Transfer: RBI approved the transfer of Rs 2.11 trillion as surplus to the Union government for FY24.

Revenue Dynamics

Tax Efficiency: Improved tax collections attributed to the efficiency of tax boards and AI implementation.
Direct Tax: Collections grew by 17.7% year-on-year to Rs 19.58 trillion, exceeding estimates.
GST: FY24 collections increased by 11.7% to Rs 20.14 trillion.