India’s fiscal deficit is likely to breach the target of 5.9% of the GDP in FY 24.
According to the India Ratings and Research, India’s fiscal deficit will surpass the 5.9% target due to high revenue expenditure and lower budgeted nominal GDP.
The central government has recently got parliamentary approval for the first supplementary demand for grants of this year.
It has increased total spending commitment for 2023-24 to ₹45.6 lakh crore including ₹35.6 lakh crore of revenue expenditure and ₹10.1 lakh crore of capital expenditure.
The main reason for the increased expenditure would be the higher expenditure by some Ministries.
The government demanded more funds for priority areas like food, fertilizer, and LPG subsidy, and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the first supplementary demand for grants.
The Central government’s fiscal deficit in the first four months of 2023-24 touched 33.9% of the full-year target.
