Govt to cut fiscal deficit to 4.5%

FM'S MANTRA | To Prioritize Spending, Growth, and Fiscal Health

The Modi government is focusing on strengthening the economy while keeping its spending in check. In the ensuing Union Budget (FY25-26), it will, therefore, aim at prioritizing spending on essential areas such as social security and infrastructure and reducing the fiscal deficit (the gap between government spending and revenue) to 4.5% of GDP.

The fiscal deficit was pegged at about Rs 16.13 lakh crore in BE 2024-25 or 4.9 percent of GDP.

FM Nirmala Sitharaman's main goal will be to balance investment in infrastructure projects and welfare programs, especially for the poor, while keeping public finances under control. This will impart long-term economic stability and spur growth.

Despite global uncertainties like ongoing wars in Europe and the Middle East, which have caused economic instability in many countries, India has managed to weather these challenges. The Finance Ministry's report credits India's strong economic fundamentals for helping it stay on track as one of the world's fastest-growing economies. However, the Ministry has warned that there are still risks to growth, and continued careful management of resources and fiscal policy is necessary.