India confident of cutting fiscal deficit to 4.5% of GDP by FY25: Finance Secy
1 min read . Updated: 03 Feb 2023, 01:18 AM IST
Premium- Announcing the Union Budget 2023-24, the government on Wednesday set a fiscal deficit target of 5.9 percent of gross domestic product for the coming financial year, which is down from the current year's target of 6.4 per cent of GDP.
India's Finance Secretary T.V. Somanathan on 2 February said that the country is 'fairly' confident it can meet its target to cut its fiscal deficit by nearly 200 basis points to 4.5% of GDP in the next three years, reported news agency Reuters.
Announcing the Union Budget 2023-24, the government on Wednesday set a fiscal deficit target of 5.9 percent of gross domestic product for the coming financial year, which is down from the current year's target of 6.4 per cent of GDP.
ALSO READ: Economic Survey 2023: Here are the key highlights
According to Somanathan, the deficit should be able to fall to 4.5 percent of GDP by 2025/26 as economic growth continues and the government aims to cut spending on subsidies, the report added.
"We are fairly determined to achieve that consolidation ... we will make a serious bid to reach the consolidation," Somanathan said.
As per India's Economic Survey forecast 2023/24, the GDP is likely to grow 6% to 6.8%, which would make it one of the world's fastest-growing major economies.
"If growth were to be sustained that would help us in future fiscal consolidation," Somanathan said.
Due to expenses related to the pandemic, the fiscal deficit has come down from a record 9.3% of GDP in 2020/21, but at 6.4% of GDP by the end of the current fiscal year it would still be much higher than its historical range of 4%-4.5%.
Since 2020/21, the Indian government has more than doubled its spending on infrastructure projects including roads, railways and ports to support growth amid weak private investment.
"I certainly think that consolidation is as much dependent on good growth as on expenditure," Somanathan said.
With agency inputs.
