India may record FY25 fiscal deficit at 4.7%-4.8% of GDP, Mint reports By Reuters

(Reuters) – India could post a fiscal deficit of 4.7%-4.8% of gross domestic product (GDP) for the current fiscal year, below the government’s estimate of 4.9%, mainly due to lower with expenses, Finance Daily Mint reported on Monday.

Lower spending on planned capital investment and higher-than-expected dividends from the central bank could lead to a smaller fiscal deficit, the report said, citing two people familiar with the matter.

The plan for fiscal year 2026 is to keep the government’s budget deficit within 4.5 percent, the newspaper writes, citing one of the sources.

India’s budget gap was 5.6% of GDP in fiscal year 2023-2024, its fiscal year running from April to March.

India’s finance ministry did not immediately respond to Reuters’ request for comment.

Through November, the government’s capital spending, or spending on building physical infrastructure, was 5.13 trillion rupees ($59.41 billion), or 46.2% of the annual target, compared with 5.86 trillion rupees in the same period last year.

Spending has been slow in the current fiscal year due to the national election, and capital spending is likely to fall short of the annual target.

A sharply higher-than-expected dividend of 2.11 trillion rupees from the reserve Bank of India (NS:), which was announced in May last year and will take effect in fiscal year 2025, will also help reduce the deficit, the report said.

($1 = 86.3310 Indian Rupees)