'Budget measures target 6.8% GDP growth in the next fiscal'

The substantial tax relief and other measures meet the expectations of the people and the larger economy's need to support consumption and investment, which can lead to a 6.8% growth next year, economic affairs secretary Ajay Seth tells Prasanta Sahu in an interview. The degree of fiscal consolidation may vary through years, but would stay the course to bring down debt-GDP to around 50% by FY31, he says. Excerpts:

- Ajay Seth, Economic Affairs Secretary

fiscal deficit by FY31? We had announced to bring down the fiscal deficit in four years or by FY26 to below 4.5%. That commitment is being fulfilled. The debt reduction roadmap is a more evolved way of fiscal consolidation. Moving forward, in the nine scenarios we have given for debt-GDP, if we do not do anything and keep the fiscal deficit at 4.4%, we will not even reach the level of 52% debt-GDP (from around 57% now). Now, the goal is to keep it on a declining path so that by 2031, we should reduce debt-GDP to at least 50 plus minus 1%. Our formal goal is even lower, at 40% but that is a bit into the future. So, every year consolidation would be needed. There would be a fiscal deficit number which should be announced for each year. If the economy is doing well, the scope for consolidation will be higher. If it is not for some reasons, and those have to be mitigated by more fiscal spending in that year, fiscal consolidation can be mild. It is a more evolved, transparent, yet very firm path.