The FY24 fiscal deficit has been revised down to 5.8 percent of GDP, Finance Minister Nirmala Sitharaman said. A revised estimate of revenues expected to be higher than budgeted, she added.
A revised estimate of revenue receipts expected higher than budgeted and the total receipts of the FY25 pegged at Rs 38.80 lakh crore, she said.
The fiscal deficit, representing the excess of the government’s total expenditures over its total earnings, is a crucial indicator of economic health.
Most brokerages expected the government to meet its budgeted fiscal deficit target of 5.9 percent.
Analysts from Jefferies and Morgan Stanley estimated the fiscal deficit for fiscal year 2025 (FY25) at 5.2 percent. In contrast, Nirmal Bang and BoB Capital Markets predicted a slightly higher figure of 5.5 percent.
Nirmal Bang analysts expected fiscal consolidation in FY25, forecasting a deficit of 5.5 percent of the GDP. They attribute this largely to moderation in government capital expenditure growth by 15 percent. The analysts outlined gross borrowings of Rs 15.2 lakh crore and net borrowing of Rs 11.6 lakh crore in their estimate.
However, Nirmal Bang took a more cautious stance, predicting some slips and setting the fiscal deficit at 6.1 percent. The various estimates highlight the complexity of forecasting economic measures amid dynamic market conditions.
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