Budget 2024: Govt likely to keep disinvestment target below ₹50,000 crore, says ICRA
fiscal deficit target at 5.3% of GDP and keep disinvestment proceeds estimates to below ₹50,000 crore in the interim budget for 2024-25. The fiscal deficit, which is the indication of government borrowing to bridge the gap between total revenue and expenditure, is estimated at 6% of GDP in the current financial year, a tad higher than 5.9% projected in the Budget presented in February, last year.
However, the direct tax and Central GST collections are expected to exceed the Budget estimates for 2023-24 by ₹1 lakh crore and ₹10,000 crore, respectively, said 'ICRA's Interim Budget 2024-25 Expectations' report on Thursday. Finance Minister Nirmala Sitharaman will present the interim budget on February 1 in the Lok Sabha.
ICRA said it is expecting the Centre's capex to undershoot the Budget Estimate of ₹10 lakh crore by ₹75,000 crore, implying a robust year-on-year growth of 26%. This growth rate is, however, lower than the required growth as per Budget estimates of 35.9% over last fiscal.
The capex has averaged at ₹73,200 crore/month, lower than the required monthly average of ₹83,400 crore to meet the budgeted target of ₹10 lakh crore. ICRA apprehends that the momentum of capex and execution of projects may slow down in early 2024 prior to the general elections, resulting in the FY24 capex target being missed.
On the disinvestment target, ICRA said given the uncertainties involved in market transactions, it will be prudent to set a moderate target of sub- ₹50,000 crore for FY25, instead of a higher aim that may disrupt the budget math if there is a large shortfall in such receipts by the end of the fiscal. "Amid delay in execution of some large disinvestment plans, a target of sub- ₹50,000 crore would be prudent for FY25,"
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