During the ongoing Budget 2024 speech, Finance Minister Nirmala Sitharaman announced the government’s fiscal targets for the upcoming financial year. The government aims to achieve a fiscal deficit at 5.1% of the Gross Domestic Product (GDP) for the financial year 2024-2025 (FY25). To meet this fiscal gap, net market borrowings from dated securities are estimated at ₹14.13 lakh crore.
In addition to outlining the future fiscal plans, the Finance Minister revised the fiscal deficit target for the current fiscal year, FY24, to 5.8% of the GDP. This revision reflects adjustments in response to evolving economic conditions and financial dynamics.
Fiscal deficit, representing the variance between total government income and expenditure, plays a crucial role in economic management. Despite a fiscal deficit of ₹9.82 trillion during the first nine months of FY24, constituting 55% of the annual estimate, the government has witnessed a decline. This positive trend is attributed to increased tax receipts and non-tax revenue.
Data from the Controller General of Accounts reveals that total receipts during this period reached ₹20.72 trillion, with tax receipts at ₹17.30 trillion and non-tax revenue at ₹3.12 trillion. Notably, total expenditure rose to ₹30.54 trillion, constituting 67.8% of the annual estimate.
The government’s fiscal deficit has been on a narrowing trajectory since FY21 when it reached 9.2%, gradually reducing to 6.4% in FY23. Sitharaman, in her previous year’s budget speech, aimed to further narrow the fiscal deficit to 5.9% of GDP in FY24 from the previous financial year’s 6.4%. These efforts showcase a commitment to fiscal discipline and responsible economic management.
As the budget proceedings continue, stakeholders and analysts will closely monitor further updates and policy decisions that shape the economic landscape. The government’s focus on managing fiscal deficits while promoting economic growth will be a key element in navigating the evolving fiscal challenges and opportunities in the coming years. Stay tuned for more updates on the unfolding budget proceedings.