India's Fiscal Deficit and Economic Growth in 2024-25
The Indian government's fiscal deficit for the first seven months of the 2024-25 financial year reached 46.5% of the annual target, according to data released on November 29, 2024. This represents a gap of Rs 7,50,824 crore between the government's expenditure and revenue during the April-October period.
The government aims to reduce the fiscal deficit to 4.9% of GDP in the current financial year, compared to 5.6% in 2023-24. However, the current data suggests that the deficit may be higher than anticipated.
Meanwhile, India's GDP growth slumped to its lowest level in seven quarters at 5.4% in the second quarter of FY25. This slowdown was attributed to a contraction in mining growth and a hit to manufacturing and utility services.
The output of eight key infrastructure sectors also expanded at a slower pace in October 2024, growing by 3.1% compared to 12.7% in the same month last year. This indicates a potential slowdown in industrial activity.
Overall, the data suggests that the Indian economy is facing some headwinds in the current financial year. The government will need to take steps to address the fiscal deficit and support economic growth.