A woman walks past an election campaign poster of the Bharatiya Janata Party (BJP) featuring their leader and India’s Prime Minister Narendra Modi (R), along a street in Varanasi on March 24, 2024, ahead of the country’s upcoming general elections. (Photo by Niharika KULKARNI / AFP)
| Photo Credit: NIHARIKA KULKARNI
Signalling a sharp rise in spending ahead of the fiscal year-end, the Centre’s fiscal deficit soared from 64% of the revised estimates in January to 86.5% by the end of February, with capital expenditure recording a sequential bounce to ₹84,400 crore last month.
In absolute value terms, the deficit hit ₹15 lakh crore in the first eleven months of 2023-24, from just ₹11 lakh crore at the end of January, and was almost 3.5% over the ₹14.5 lakh crore over the same period in the last financial year.
Economists believe the final numbers for this year, to be released at the end of April, will be well within the ₹17.3 lakh crore revised target set in last month’s Union Budget, with a good chance it may undershoot the goal that is equivalent to 5.8% of GDP.
The Centre still has headroom left for ₹6 lakh crore of revenue spending in March, 9% over the ₹5.5 lakh crore spent in the last month of 2022-23, Aditi Nayar, chief economist at ICRA pointed out.
On the capex front, the government still needs to spend ₹1.4 lakh crore in March to meet its target, which is a tad lower than the ₹1.5 lakh crore spent in March 2023. However, the capex goal is likely to be missed thanks to the Model Code of Conduct for the upcoming General Elections kicking in, Ms. Nayar reckoned.
“The government accounts show the Centre’s spending is still short of its target by about ₹7.4 lakh crore with major shortfalls seen in Agriculture (₹20,668 crore), Rural Development (₹48,088 crore), Chemicals and Fertilisers (₹16,150 crore), Roads (₹26,000 crore) and Consumer Affairs (₹35,117 crore),” said Bank of Baroda chief economist Madan Sabnavis. If these amounts are not exhausted in March, it could result in savings of ₹50,000-₹60,000 crore, he emphasised.
