Gross borrowing to be pegged at Rs 15.3 lakh crore for FY25; fiscal deficit at 5.5%: SBI Research
government will marginally bring down the gross borrowing to Rs 15.3 lakh crore in FY25, as it pegs the fiscal deficit at 5.5% of the GDP in the interim budget, SBI researchers said Wednesday.
“We believe in FY25, net market borrowing of the Centre will be around Rs 11.7 lakh crore, and with repayments of Rs 3.6 lakh crore, gross borrowings are expected to be at Rs 15.3 lakh crore. However, the Government will adjust in switches, and this could adjust gross borrowings lower than Rs 15 lakh crore,” the researchers said.
They also noted that there might be adjustments to the fiscal deficit in July when the new government releases its full budget.
“The final budget to be presented in July could set it at a lower level of 5.3%-5.4% depending on GDP numbers that will be released in May 2024,” it said, noting that government will continue to rely on small saving schemes for financing of fiscal deficit.
The government has set a target of bringing down the fiscal deficit to 4.5% of GDP by FY26.
“It can give a hard push to Sukanya Samriddhi Yojana through encouraging fresh registrations in a mission drive mode, allowing one-time registrations for all leftover cases up to 12 years,” they said.
SBI researchers noted that the government will likely be able to achieve its fiscal deficit target of 5.9% in FY25.
“Gross tax revenue at 11.6% of GDP in FY24 is likely to be a 16-year high. In FY25, we expect gross tax revenue to be at the highest ever in the last 2 decades,” they noted.
SBI predicts nominal GDP growth of 11% in FY25, with real growth at 6.8%.
