India Ratings and Research on Wednesday said that by controlling expenditure, the government will be able to keep the fiscal deficit at 4.75 percent in the financial year 2024-25, which is 0.19 percent less than the budget target. The domestic rating agency said revenue expenditure excluding subsidies will be 0.12 per cent 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, 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 expenditure
However, Pant said government capital expenditure would still be 10.6 per cent higher than a year earlier. The government had initially estimated 17.6 percent growth in capital expenditure. The rating agency said that even though government 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, “The growth in capital expenditure for the financial year 2024-25 was affected by the general elections held in April-May and the capital expenditure in the first half was down by 15.42 percent on an annual basis. In such a situation, to reach the budget target, capital expenditure should increase by 52.04 percent in the second half of the financial year, which seems a difficult task.
there is concern here
India Ratings expects the Railways and Road, Transport and Highways ministries to exceed their capital expenditure allocations. But on the subsidy front, GDP will decline by 0.10 percent due to higher expenditure on food, fertilizer and petroleum subsidies.
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