FY25 Fiscal Deficit Stays Close to Target on Higher Revenue

India's fiscal deficit in the previous fiscal year was largely in line with what the government targeted, as higher revenue cushioned the impact of more-than-expected capital expenditure.

- Rhik Kundu

The country's fiscal deficit for FY25 stood at ₹15.77 trillion compared with the ₹15.70 trillion estimated for the year, according to the provisional data released by the Controller General of Accounts (CGA) on Friday. It is lower than the ₹16.54 trillion registered in FY24, which was 95.3% of the estimates.

The Centre had budgeted a fiscal deficit at 4.8% of the gross domestic product (GDP) for FY25, and targets to reduce it to 4.4% in 2025-26.

Fiscal deficit is the shortfall between the government's spending and revenue, excluding borrowings. It shows how much the government must borrow to meet its expenses. While some deficits can spur growth, a high number risks inflation and debt, making careful fiscal management essential.