Budget 2024: The State Bank of India's research team predicts a moderate growth of 7.3% in government expenditure in the upcoming interim budget. The projected budget is anticipated to reach just under Rs 49 lakh crore (Rs 48.9 lakh cr) in the next fiscal year. For the current fiscal year Rs 45 lakh cr - Rs 46 lakh cr was allocated.
The expenditure on subsidy is expected to be reduced to Rs 3.8 lakh crores, slightly below the existing subsidy expenditure of Rs 3.92 lakh crore in the current financial year. Likewise, the report also forecasts a slowdown in capital expenditure predicting a 15% increase from the 33.7% surge seen in the current year's budget, amounting to Rs 11.5 lakh crores.
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On the tax front, the bank expects the net tax collection to surpass government's estimates by Rs 80,000 crore. The net tax collection is estimated to grow by 10.5% over this year's revised estimates. This would result in a net tax collection of Rs 26.52 lakh crores for the government in the next fiscal.
SBI's detailed research report, led by Group Chief Economic Advisor Soumya Kanti Ghosh has also raised concerns over the economic growth. The report anticipates a slowdown in the real GDP to 6.8% in the next financial year, compared to the forecasted 7.3% for the current year. However, the bank expects the government to project a nominal GDP growth of 11%, reaching Rs 329 lakh crore.
Meanwhile, the fiscal deficit is likely to increase to Rs 18 lakh crore in FY25 compared to this year's ₹17.86 lakh crores. The gross market borrowings is estimated to grow to Rs 5.3 lakh crores in FY25. The bank estimates that a likely 5.5% deficit target could disrupt the government's plans.