Budget 2024: Fiscal deficit target reduced to 4.9% with focus on consolidation

Union Finance Minister Nirmala Sitharaman announced a fiscal deficit target of 4.9% of GDP for the current fiscal year. This marks a reduction from the 5.1% target set in the Interim Budget presented on February 1, and a decrease from the 5.9% target set for 2023-24, which was later revised to 5.8%.

The fiscal deficit, representing the gap between total revenue and total expenditure, reflects the extent of government borrowing needed. Sitharaman emphasized the government’s commitment to fiscal consolidation, with a goal to reduce the deficit to below 4.5% of GDP by the 2025-26 financial year.

“The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 percent next year,” Sitharaman said.

“The government is committed to stay the course. From 2026-27 onwards our endeavor will be to keep fiscal deficit each year such that the central government’s debt will be on a declining path as percentage of GDP,” she added.

(ANI)