Record surplus transfer from the Reserve Bank of India is estimated to have impact up to 30 basis points of GDP on government finances, Finance Secretary TV Somanathan said. Meanwhile, another official said that impact on government finances cannot be directly translated into fiscal deficit number.  

Transfer of ₹ 2.10-lakh crore likely to have impact ranging between 0.2 to 0.3 per cent of GDP on government finance,” Somanathan said. Another official said that this does not translate directly into fiscal deficit number for fiscal year 2024-25 (FY 25). “There are so many other things to keep in mind including possible increase in the expenditure. So, what will be our fiscal deficit number in full Budget of FY 25, that can not be said now,” he said.

Final Budget for FY25 is expected to be presented in July, post formation of government. In the interim budget, the government said that as announced in the Budget Speech for FY 2021-22, it would continue on the broad glide path of fiscal consolidation to reach a fiscal deficit to GDP level below 4.5 per cent by FY 2025-26. In line with this commitment, RE 2023-24 projects fiscal deficit to GDP of 5.8 per cent, which is lower than the Budget estimate of 5.9 per cent. It is estimated that the fiscal deficit will be 5.1 per cent of GDP in FY 2024-25, the Budget document said.

The government had budgeted a receipt of ₹1.02-lakh crore as dividends from the RBI, public sector banks and financial institutions in the interim budget for FY25. The dividend or surplus transfer by the RBI to the Centre was ₹87,416 crore for fiscal 2022–23. The previous high was ₹1.76-lakh crore in 2018-19.

During the current fiscal, revenue collection has begun on a very positive note with GST collection in April crossed ₹2-lakh crore. Experts believe that the interim budget revenue targets for FY24-25 are a tad conservative, with the government assuming a tax buoyancy lower than the previous year. “Given that nominal GDP growth for FY24-25 (interim budget projection: 10.5 per cent) is expected to grow faster than FY23-24 (9.1 per cent), we think there is a possibility of an overshoot in revenue receipts, provided that economic momentum holds up,” Shreya Sodhani, Regional Economist of Barclays said in a note..