Govt Likely to Revise Fiscal Deficit Target to 5% of GDP in Budget 2024-25

New Delhi, Jun 11 (KNN) The Indian government is expected to revise down its fiscal deficit target for the current financial year 2024-25 from the previous 5.1 per cent of GDP to around 5 per cent or lower, according to sources familiar with the matter.

As the newly elected government swings into action to translate Prime Minister Narendra Modi's development agenda into budgetary proposals, officials say the full budget for FY25 will continue the economic strategy of the previous administration.

"The budget will continue to focus on welfare schemes for the underprivileged, raising farmers' income, development for-and-by women and young people, with micro, small and medium enterprises to act as engines of economic growth," said a source.

Based on continued revenue buoyancy and prudent expenditure management, the government expects a stronger fiscal consolidation path.

One official indicated the fiscal deficit could be brought down to 4.8 per cent of GDP in FY25, although a final decision rests with the competent authorities.

The interim budget presented in February had pegged the fiscal deficit at 5.1 per cent for FY25, revising the previous year's deficit down to 5.8 per cent from 5.9 per cent.

However, provisional data shows the FY24 deficit came in lower at 5.63 per cent.

Experts suggest the government has fiscal room due to robust tax collections and economic growth prospects. They expect the budget to enhance allocations for flagship schemes like affordable housing and the Mudra loan program for small businesses.

The budget for FY25 is likely to be presented in Parliament in the second week of July, about a month after the new government assumed office on Sunday.

(KNN Bureau)