Spurt in consumption to drive revenue buoyancy: FM

Finance Minister Nirmala Sitharaman has expressed confidence that revenue buoyancy driven by spurt in consumption will take care of the estimated GST shortfall of Rs 48,000 crore following reduction in tax rates on a host of items, and hence there will be no impact on public finances but definitely bolster GDP growth.

- PTI

She also emphasised that consumption boost to be provided by landmark GST reform and better-than-expected first quarter GDP growth number may help in exceeding the projected pace of 6.3-6.8 per cent for FY26.

Asked about impact of GST rate cuts on fiscal deficit, Sitharaman said, Rs 48,000 crore financial implication is a static number based on a base year, but when it gets implemented, base situation changes.

"So, I think the consumption spurt from September 22 will increase income buoyancy. To a large extent, this Rs 48,000 crore amount we will be able to make it up this year itself. So I don't see an impact on my fiscal deficit or my fiscal management. I will stick to my numbers (of 4.4 per cent of GDP)". Sitharaman told PTI in an interview.

The Centre estimates the fiscal deficit during 2025-26 at 4.4 per cent of the GDP, or Rs 15.69 lakh crore.

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