Post by Centrum Wealth

State Finances: Sustaining Capex While Managing Fiscal Pressures Revenue Deficit Edges Higher: Revenue deficit remains low in the initial years but trends upward from FY25 onwards, indicating emerging pressure on revenue balances. While the increase to 1.2% by FY27P reflects some deterioration in fiscal discipline, levels remain contained. Capex Remains Sustained: Capex remains steady in the 2.1%–2.4% range, indicating continued focus on growth-oriented spending. Despite rising fiscal pressures, there is no meaningful compression in capex, suggesting prioritization of infrastructure and development. The stability in capex underscores a commitment to maintaining investment-led growth. Fiscal Deficit Gradually Expands: Fiscal deficit is expected to increase from 2.8% in FY23 to 3.5% by FY27, reflecting a gradual expansion in borrowing. The rise is driven by sustained capital expenditure along with a steady increase in revenue deficit. While deficits are trending higher, they remain within a manageable range. The trajectory suggests a measured expansion in spending rather than a sharp deterioration in fiscal quality. Overall, the fiscal trajectory reflects a calibrated balancing act—prioritizing growth through sustained capital expenditure while gradually navigating emerging pressures on revenue balances and deficits within manageable limits. Centrum Wealth Limited – AMFI registered Mutual Fund Distributor Registration no ARN 82601, APMI Registered Distributor for Portfolio Management Services APRN -02283   Centrum PMS is registered under - Centrum Investment Advisors Limited– SEBI Registration: INP 000007535, Investment Advisors: INP000001761   For Disclaimer - https://lnkd.in/dRF5EkcY #CentrumWealth #WeForYou #Capex #FiscalDeficit