The government has allocated Rs 11.1 lakh crore as capital expenditure for the next fiscal year, marking a rise of 11.1 per cent, Finance Minister Nirmala Sitharaman said in her budget speech on Thursday.

Brokerages had predicted that there would be a slowdown in capital expenditure growth with focus shifting towards alleviating rural stress and addressing the needs of the economically vulnerable.

Also, the FY24 fiscal deficit has been revised down to 5.8 per cent of the GDP, Sitharaman said.

Revised estimate of revenue receipts is expected to be higher than budgeted, and the FY25 total receipts were pegged at Rs 38.80 lakh crore, she said.

The fiscal deficit, representing the excess of the government’s total expenses over its total earnings, is a crucial indicator of economic health.

Finance Minister Sitharaman has resisted populism during the election year by capping the fiscal deficit to 5.8 per cent during this fiscal and pegging it to 5.1 per cent in the next fiscal backed by buoyancy in tax collections.

“We continue on the path of fiscal consolidation, as announced in my Budget Speech for 2021-22, to reduce the fiscal deficit below 4.5 per cent by 2025-26. The fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP, adhering to that path,” she said.

Most brokerages had anticipated the government to align with its budgeted fiscal deficit target of 5.9 per cent.

Notably, the analysts from Jefferies and Morgan Stanley had estimated the fiscal deficit for the fiscal year 2025 (FY25) at 5.2 per cent. Nirmal Bang and BoB Capital Markets had anticipated a slightly higher figure of 5.5 per cent.

Total receipts other than borrowings and total expenditure are estimated at Rs 30.80 and Rs 47.66 lakh crore respectively.

The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs 14.13 lakh crore and 11.75 lakh crore respectively. Both will be less than that in 2023-24.

Now that the private investments are happening at scale, the lower borrowings by the Central Government will facilitate larger availability of credit for the private sector, she said.

Revised Estimate of the total receipts other than borrowings is Rs 27.56 lakh crore, of which the tax receipts are Rs 23.24 lakh crore. The Revised Estimate of the total expenditure is Rs 44.90 lakh crore.

The revenue receipts at Rs 30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth momentum and formalisation in the economy.

The Revised Estimate of the fiscal deficit is 5.8 per cent of GDP, improving on the Budget Estimate, notwithstanding moderation in the nominal growth estimates.

“Coming to 2024-25, the total receipts other than borrowings and the total expenditure are estimated at Rs 30.80 lakh crore and Rs 47.66 lakh crore respectively. The tax receipts are estimated at Rs 26.02 lakh crore. The scheme of 50-year interest free loan for capital expenditure to states will be continued this year with a total outlay of Rs 1.3 lakh crore,” she said.