The finance minister revised the fiscal deficit for FY24, setting it at 5.8 per cent of the GDP.
Finance Minister Nirmala Sitharaman, during her Budget speech, announced a revision in the fiscal deficit for FY24, setting it at 5.8 per cent of the GDP. Additionally, she mentioned that the revised estimate for revenue receipts is anticipated to be higher than initially budgeted. “The government now targets reducing the fiscal deficit below 4 per cent by FY26,” she said.
On Wednesday, the data released by the Controller General of Accounts showed that the Centre’s fiscal deficit came in at 55 per cent of the budget estimate (BE) in the first nine months of the current financial year, compared with 59.8 per cent of the respective target in the year-ago period. Last year, the Centre had met the deficit target of 6.4 per cent.
India aims to narrow its fiscal deficit to 5.9 per cent of gross domestic product by the end of this fiscal year, from 6.4 per cent last year. The government’s fiscal deficit during the first nine months of the current financial year stood at Rs 9.82 trillion, or 55 per cent of the annual estimate of Rs 17.87 trillion, according to data. Fiscal deficit for the same year-earlier period was Rs 9.93 trillion, or 59.8 per cent of the annual estimate of Rs 16.61 trillion for FY23.
Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, said, “The Government has walked the path of fiscal prudence, and it is heartening to note that the fiscal deficit target for FY24, pegged at 5.8 per cent, will be overachieved. The fiscal deficit being pegged at 5.1 per cent for FY25 is a positive move as it will help free up space for private borrowings as they pick pace during the year, besides helping in containing inflationary pressures and supporting the bond markets.”
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The hallmark of this interim Budget is its fiscal rectitude. The fact that the Government has prioritised fiscal consolidation over populism on the eve of general elections is commendable. The fiscal deficit numbers of 5.8 per cent in the revised estimates for FY24 and 5.1 per cent for FY25 are better than the most optimistic expectations. This is very good news for the economy and consequently for the market.”
Source:financialexpress.com