At ₹15.01lakh crore, fiscal deficit widens in AprilFeb

New Delhi: The Centre’s fiscal deficit widened in AprilFebruary 2024 to ₹15.01lakh crore, which is about 86.5 per cent of Revised Estimate of ₹17.35lakh crore, official data released on Thursday showed. The fiscal deficit in the same period a year ago stood at ₹14.53lakh crore, which was 82.8 per cent of revised estimate. Till January, fiscal deficit was at about ₹11lakh crore.

India got overseas flows to the tune of ₹3.33lakh crore, or $40.4 billion, in equities, debt, and hybrid instruments put together this financial year, a record for any year. This is 25 per cent higher than the previous high of ₹2.67lakh crore garnered in FY21.

Equity flows stood at over $25 billion, more than the flows received by all other Asian markets except Japan, which received $59.5 billion. China, on the other hand, saw outflows of over $67 billion in the 12 months to December. Some of the flows could have made their way into India.

According to reports, emerging market investors in the US are increasingly favouring exchangetraded funds that avoid exposure to China. There is a noticeable uptick in interest towards MSCIexChina ETFs.

India’s market cap is currently the fifth largest globally, but India’s weight in global indices is still low. This should change as marketfree float rises and some weight anomalies get sorted out, according to Jefferies. India will become a $10 trillion market by 2030, which is impossible for large global investors to ignore, the brokerage said in a recent note. The market depth in India has also increased considerably over the last few years, with the number of stocks with a market cap of more than $1 billion nearly doubling to 500.

“The flows have largely been driven by the performance of our economy, which has done well despite geopolitical conflicts, Covid and rate action by the US Fed. Quite a lot of the growth is domesticled, and there is still scope for further improvement given the migration to urban areas,” said UR Bhat, director of Alphaniti Fintech. Bhat added that the PLI schemes and the China plus one story had helped the cause of Indian manufacturing. The massive investment in infrastructure modernisation is helping companies in the materials, real estate and construction sectors. Banks now have cleaner balance sheets with low NPAs, which augurs well for the economy.

INCLUSION IN GLOBAL BOND INDICES

FPIs have invested $14.4 billion in Indian debt, higher than all other years except FY15 and FY18. Investors have taken a shine to government bonds since September last year, anticipating India’s inclusion in global bond indices. Another $1.5 billion of FPI money has flowed into hy