India on track to meet FY25 fiscal deficit target of 4.8%: BoB report

PTI New Delhi

The central government is on course to meet its fiscal deficit target of 4.8 per cent of GDP for the financial year 2024-25 (FY25), according to a report by Bank of Baroda. The report attributed this to factors such as a higher-than-expected nominal GDP growth rate, steady revenue receipts, and controlled expenditure growth.

It said, "We believe that government remains on track to meet its fiscal deficit target of 4.8 per cent for FY25." The report highlighted three major reasons why the government is likely to achieve its fiscal deficit goal. Firstly, the nominal GDP growth rate is expected to be 9.9 per cent, slightly higher than the 9.7 per cent projected in the Union Budget. A higher GDP growth rate typically supports better revenue collections and helps manage fiscal deficit targets.

Secondly, government spending had started slowly in the first half of the fiscal year due to the general elections. However, the pace picked up in the latter half (H2), ensuring that overall expenditure remained in line with targets.