Budget 2024: The math of how the Centre will cut its fiscal deficit, explained

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Data explainer: Why the Union budget can do only so much In the wake of an unexpectedly poor performance in the General Election, the government loosened its purse strings by announcing a higher revenue expenditure—funds allocated for day-to-day operations—raising it to 11.4% from the 11.2% projected in the interim budget. Capital expenditure, the second major component of spending, will rise to 3.4% of GDP from 3.2% in FY24.

This adjustment means total expenditure is now pegged at 14.8% of GDP, slightly down from 15% in FY24 but higher than the 14.5% anticipated in the interim Budget. More here | Income tax cuts in Budget are a half-hearted recipe to fix India’s consumption woes However, this increase in spending relative to the February budget did not result in the fiscal deficit aim taking a hit as the government also managed to raise its total receipts to 9.8% of GDP from 9.4% in FY24.

The government has maintained a nominal GDP growth projection of 10.5% for FY25, consistent with the interim budget's forecast, although the absolute projected nominal GDP is slightly lower at ₹326 trillion compared to the ₹327 trillion estimated earlier. Also read | Economic Survey: The government’s recipe for growth, in 12 charts The latest Budget continues to prioritize fiscal consolidation over higher spending, maintaining the stance set in the interim budget.