India needs 4.9% fiscal deficit target in 2024 for consolidation, SBI research

Ahead of the highly anticipated full Budget for 2024-25, set to be tabled on July 23—the first under Prime Minister Narendra Modi’s third term—SBI Research has advised the government to maintain fiscal prudence and continue on the path of fiscal consolidation.

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The fiscal deficit, representing the difference between total revenue and total expenditure, indicates the total borrowings required by the government.

SBI Research has recommended that the government target a fiscal deficit of 4.9 percent for the upcoming fiscal year. However, the advisory also cautioned against an excessive focus on the fiscal stance. The government aims to reduce the fiscal deficit below 4.5 percent of GDP by the financial year 2025-26. Earlier this year, in the Interim Budget, the government set a fiscal deficit target of 5.1 percent of GDP for 2024-25.