Govt stays the course on fiscal consolidation path

Centre revises fiscal deficit estimate for FY24 to 5.8% of GDP from 5.9% estimated in last year's budget; vows to bring it below 4.5% by 2025-26

- Rajeev Jayaswal

The government is on the path of fiscal consolidation, finance minister Nirmala Sitharaman said in her interim budget speech, revising the fiscal deficit estimate for FY24 to 5.8% of GDP from 5.9% estimated in the budget last year, and reiterated her resolve to bring it below 4.5% by 2025-26, targeting 5.1% in FY25 on the back of buoyant tax collections and better targeting of expenditure.

Recalling her budget speech of 2021-22, she said the government continues on the path of fiscal consolidation to reduce fiscal deficit below 4.5% by 2025-26.

Presenting Union Budget for FY22 on February 1, 2021 - when global economies were devasted by the Covid-19 pandemic and government's support to life and livelihoods saw a surge in fiscal deficit to 9.5% of GDP (2020-21 RE)-Sitharaman said: "To ensure that the economy is given the required push... the fiscal deficit in BE (budget estimates) 2021-2022 is estimated to be 6.8% of GDP... We plan to continue with our path of fiscal consolidation, and intend to reach a fiscal deficit level below 4.5% of GDP by 2025-2026 with a fairly steady decline over the period."