Govt’s FY24 deficit falls to 5.6 per cent against budgeted 5.8 per cent

The government managed to stay tight fisted when it comes to revenue expenditure, which are used for salary and pension payments.
Govt’s FY24 deficit falls to 5.6 per cent against budgeted 5.8 per cent

NEW DELHI: The central government’s finances performed better than expected in 2023-24 as the fiscal deficit for the year came at 5.6% against the revised estimate of 5.8%.

The fiscal deficit in value was Rs 16.54 lakh crore against the revised budget estimate of Rs 17.35 lakh crore. The lower-than-estimated fiscal deficit was as a result of better than anticipated receipts and lower than estimated revenue spending, and a marginal miss in the capital expenditure.

The net tax collection (net of states share) at Rs 23.27 lakh crore is same as the revised budget estimate. However, Gross tax collections surged 13% during the year to Rs 34.65 lakh crore during the year against Rs 30.54 lakh crore in the previous year driven mainly by strong growth in personal income tax (25% YoYgrowth), and Central GST (14% YoY growth).

Personal Income tax collection crossed Rs 10 lakh crore for the first time in FY24. Corporate tax collection during the year increased by 10.3% to Rs 9.11 lakh crore.

The government managed to stay on course of a strong capex in the year with Rs 9.5 lakh crore spent on infrastructure building and asset creation during FY24. The capex during the year was 28% higher than the previous year.

The government managed to stay tight fisted when it comes to revenue expenditure, which are used for salary and pension payments. The government spent Rs 34.94 lakh crore in revenue expenditure during FY24 compared to Rs 34.54 lakh crore in the previous year.

Experts say with a bumper dividend by RBI, the overall fiscal dynamics appear favourable for FY25. RBI paid a dividend of Rs 2.11 lakh crore, which is more than double the amount (Rs 1.02 lakh cr) budgeted for the year.

Amid continued resilience in GST collections and an unexpectedly large dividend payout by the RBI, the fiscal deficit in FY25 is likely to be around 4.9-5.1%, says Aditi Nayar, Chief Economist at ICRA Ltd.

Core sector output increases 6.2% in April

NEW DELHI: Index of eight core industries grew 6.2% in April, 2024 against 6% in March 2024. The mild expansion was due to improved sequential performance of five of the eight constituents even cement manufacturing saw a sharp decline of 0.6% in April compared to 10.6% in the previous month. Coal and crude oil also saw modest decline during the month.

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