India’s fiscal deficit in April-November at 52.5% of full-year goal

India’s fiscal deficit, or the difference between the government’s total expenditure and its total revenue (excluding borrowings), in the first eight months of fiscal year 2025 reached 52.5% of its annual target at ₹8.47 trillion ($98.9 billion), government data showed.

The fiscal deficit in the comparable year-ago period (April to November 2023) was lower at 50.7%, indicating that over half of the government’s annual borrowing target has been utilized within this period.

Total receipts during the period stood at ₹18.94 trillion, including ₹14.43 trillion tax revenue, ₹4.27 trillion non-tax revenue, and ₹23,953 crore of non-debt capital receipts.

Total expenditure incurred by the government was recorded at ₹27.41 trillion, of which ₹22,27 trillion is on revenue account such as salaries, subsidies, and interest payments, and ₹5.13 trillion is on capital account or long-term investments, such as building infrastructure such as roads, schools, or hospitals.

Capital expenditure at ₹5.13 trillion was lower than the ₹5.86 trillion spent in 2023, or 46.2% of the annual target. The decline in the capital expenditure was attributed to national elections and it may lead to capital spending to fall short of the year’s target.

Core sector output grows

India’s core sector output, comprising 40% of the country’s industrial output, rose 4.3% in November from a year ago, driven by cement (13%), coal (7.5%), steel (4.8%), and electricity (3.8%).

The core sector is measured by the combined index of eight industries: coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity, which collectively account for 40.27% of the Index of Industrial Production (IIP).

From April to November 2024-25, core sector output grew 4.2% year-on-year, according to commerce ministry data.

In November, coal, cement, petroleum products, and electricity production increased, while crude oil and natural gas output declined by 2.1% and 1.9%, respectively.

Over the same eight-month period, crude oil production fell 2.4%, while natural gas output rose 1.1%.

Aditi Nayar, chief economist at ratings agency ICRA, noted the November improvement from 3.7% in October was driven by cement growth, aided by a low base and reduced rainfall impact.

“The sequential uptick in the core sector’s performance was especially driven by a sharp increase in the growth of cement output, on the back of a low base,” Nayar said.

ICRA said it expects IIP growth to range from 5-7% in November, supported by core sector performance.