The government will continue its focus on improving quality spending, strengthening the social security net and reducing the fiscal deficit to 4.5 per cent of the GDP in the financial year 2025-2026, according to a Finance Ministry statement.
Finance Minister Nirmala Sitharaman is expected to continue with the government’s position of increasing expenditure on big-ticket infrastructure projects and social welfare schemes for the poor while keeping the fiscal deficit in check when she presents the Union Budget for 2025-26 in Parliament on February 1.
The government is committed to pursuing the glide path of fiscal consolidation which aims to lower the fiscal deficit to 4.5 per cent of GDP by financial year 2025-26, according to Finance Ministry statements on the half-yearly review of the trends in receipts and expenditure.
“The thrust will be on improving the quality of public spending, while at the same time, strengthening the social security net for the poor and needy. This approach would help further strengthen the nation’s macro-economic fundamentals and ensure overall financial stability,” the review said.
According to the statements, the Budget 2024-25 was presented against the backdrop of global uncertainties caused by the wars in Europe and the Middle East. India’s sound macroeconomic fundamentals have cushioned the country from the vagaries afflicting the global economy.
“It has also helped the nation pursue growth with fiscal consolidation. As a result, India retains its pride of place as one of the fastest-growing economies in the world. However, risks to growth still remain,” it said.
Taking into account the grant for the creation of capital assets, the effective capital expenditure was projected at Rs 15.02 lakh crore. Gross Tax Revenue was estimated at Rs 38.40 lakh crore with an implied tax-GDP ratio of 11.8 per cent.