India Ratings and Research said on Wednesday that by reining in spending, the government will be able to keep the fiscal deficit at 4.75 per cent in the financial year 2024-25, which is 0.19 per cent less than the budget target. The national rating agency said revenue expenditure, excluding subsidies, will be 0.12 percent of gross domestic product (GDP) in the current financial year, which is lower than the budget estimate. Devendra Kumar Pant, chief economist and head of public finance at India Ratings, said the government’s capital expenditure at the end of fiscal year 2024-25 will be Rs 62,000 crore less than the budget estimate of Rs 11.11 lakh crore.
government capital spending
However, Pant said the government’s capital expenditure would remain 10.6 per cent higher than the previous year. The government had initially estimated 17.6 percent growth in capital spending. The rating agency said that although the government’s capital expenditure has declined, capital expenditure as a proportion of GDP in the current financial year is estimated to be 3.21 per cent, which is the highest level in two decades. . The agency said: “Capital expenditure growth for the 2024-25 financial year was affected by the general elections held in April-May and capital expenditure in the first half decreased by 15.42 per cent year-on-year. In such a situation, to achieve the budget target, capital expenditure would have to increase by 52.04 percent in the second half of the fiscal year, which seems like a difficult task.
there is concern here
India Ratings expects the ministries of Railways and Highways, Transport and Highways to exceed their capital expenditure allocations. But on the subsidy front, GDP will decline by 0.10 percent due to higher spending on food, fertilizer and oil subsidies.
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