Quote by Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd on GoI Fiscal

” The Government of India’s fiscal deficit stood at Rs. 11.0 trillion or 64% of the FY2024 RE in April-January FY2024, lower than the Rs. 11.9 trillion recorded in April-January FY2023. While net tax revenues rose by 11%, non-tax revenues expanded by 46% boosted by the RBI dividend, amidst a tepid 1.4% growth in revenue expenditure, and a strong 26.5% YoY expansion in capex. While there may be some slippage in the disinvestment target and capex  may trail the FY2024 RE, ICRA does not expect the revised fiscal deficit target of Rs. 17.3 trillion for FY2024 to be breached. 
The GoI’s capex slumped  to Rs. 476 billion in January 2024 from nearly Rs. 800 billion in January 2023, kicking off Q4 FY2024 on a sour note. With Rs. 2.3 trillion trillion left to be incurred in Feb-March 2024 to meet the full year target for capex this fiscal, substantially higher than the Rs. 1.7 trillion recorded in the same months of FY2023, ICRA expects the GoI’s capex to undershoot the FY2024 RE by at least Rs. 0.5 trillion.
Notably, the headroom left for revenue spending in the last two months of FY2024 (Rs. 9.1 trillion) is 6% higher than the expenditure of Rs. 8.6 trillion recorded in the year-ago period. The Government’s gross tax revenues need to record a moderate 6% growth in the last two months of FY2024 to meet the RE for the year, which seems imminently achievable. In particular, the corporate tax collections may exceed the FY2024 RE.The Government of India (GoI) has released Rs. 8.9 trillion as tax devolution to the states in FY2024 till Feb 12, 2024. This left Rs. 2.1 billion for disbursal to the states to meet the target tax devolution of Rs. 11 trillion indicated in the FY2024 RE by the GoI. The timing of release of the same would impact SGS issuance in March 2024.”