This further bolsters the official assertion that the Centre would meet its revised FY24 fiscal deficit goal of 5.8% of gross domestic product (GDP), a tad better than the budgeted 5.9%, despite a moderation in nominal GDP growth from the initial target.
In absolute terms, the fiscal gap until January for FY24 dropped 7.3% from a year ago period to ₹11.03 lakh crore, on the back of a sharp decline in five of the past six months. The deficit in December alone fell over 39% on-year to ₹ 1.20 lakh crore.
Revenue spending moderated for a fifth month in a row through January from a year earlier after a spike in the initial months of FY24. At ₹26.34 lakh crore, it stood at 74.4% of the FY24 target in the first 10 months, against 75.1% a year ago. Capital spending jumped at a much faster rate until January, but at 26.6%, the growth remained lower than the revised annual target of 28.4%.
Given that such spending usually slows down around the general elections, some experts expect the capex to fall short of the FY24 revised estimate of ₹9.50 lakh crore and help the government meet its fiscal deficit target. At ₹7.21 lakh crore until January, capex touched 75.9% of the annual target, compared with 78.3% in the year ago period.
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