India’s Fiscal Deficit Widens to 46.5% in FY25 Amid Core Sector Growth

New Delhi: India's fiscal deficit widened to 46.5 percent of FY25 at Rs 7.51 lakh crore, which was higher than the previous year’s 45 percent for a similar period. While the country's eight core sectors' output surged by 3.1 per cent in October as compared to a growth of 2 per cent in September, two separate government data showed on Friday.

According to data released by the Controller General of Accounts (CGA), in absolute terms, the fiscal deficit the gap between the government's expenditure and revenue -- was at Rs 7,50,824 crore during the April-October period. "The Centre's fiscal deficit at the end of the first seven months of financial year 2024-25 touched 46.5 per cent of the full-year target," the data showed.

In the Union Budget, the government had projected to bring down the fiscal deficit to 4.9 per cent of gross domestic product (GDP) in the current 2024-25 financial year. The deficit was 5.6 per cent of the GDP in 2023-24. In absolute terms, the government aims to contain the fiscal deficit at Rs 16,13,312 crore during the current fiscal.

As per the data, the total receipts stood at Rs 17.23 lakh crore, while the central government's total expenditure in the seven months through October stood at Rs 24.7 lakh crore or 51.3 percent of budget estimate and expenditure was 53.2 per cent of the budget estimate in the year-ago period. However, the revenue-expenditure data of the Centre for the first seven months of 2024-25 showed that the net tax revenue was about Rs 13 lakh crore or 50.5 per cent of the budget estimate for the current fiscal.

Of the total expenditure, Rs 20 lakh crore was in the revenue account and Rs 4.66 lakh crore in the capital account. Fiscal deficit is the difference between the total expenditure and revenue of the government, which is an indication of the total borrowing that is needed by the government.

Meanwhile, the eight core industries’ output growth hit a two-month high of 3.1 per cent, sharply lower than the 12.7 per cent growth seen in the same month last year. Six of the eight core industries’ output were in the positive territory in October 2024. The eight core industries — coal, natural gas, crude oil, refinery products, fertilizers, cement, steel and electricity — comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).

As per the data released by the Commerce and Industry Ministry, the latest reading was, however, higher than the revised 2.4 per cent growth recorded in September 2024. In August 2024, the core sector industries had contracted 1.6 per cent. For the period April-October 2024, the aggregate core industries output grew 4.1 per cent, substantially lower than the 8.8 percent growth recorded in the same period last fiscal,

"The sectors that showed positive growth in October 2024 are coal (7.8 per cent), refinery products (5.2 per cent), fertilisers (0.4percent), cement (3.3 per cent), steel (4.2 per cent) and electricity (0.6 per cent). The two industries that saw output contraction are crude oil (-4.8 per cent) and natural gas (-1.2 per cent), the data showed.