India may record lower fiscal deficit

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BENGALURU- India may record a fiscal deficit for the current fiscal year at 4.7 percent-4.8 percent of gross domestic product (GDP), lower than the government’s estimate of 4.9 percent, primarily driven by lower expenditure, finance daily Mint reported on Monday.

Lower spending on planned capital investments and a higher-than-anticipated dividend from the central bank could lead to a smaller fiscal deficit, the report said, citing two people aware of the matter.

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

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India’s budget gap stood at 5.6 percent of GDP in fiscal year 2023-2024. Its financial year runs from April through March.

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

Till November, the government’s capital expenditure, or spending on building physical infrastructure, was 5.13 trillion rupees ($59.41 billion), or 46.2 percent of the annual target, against 5.86 trillion rupees for the same period a year earlier.

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