The government will maintain its focus on enhancing the quality of public expenditure, bolstering the social security safety net, and reducing the fiscal deficit to 4.5% of GDP by the 2025-26 financial year, according to a finance ministry document.
Finance Minister Nirmala Sitharaman is set to present the 2025-26 Union Budget in Parliament on 1 February.
The Union government remains committed to following the fiscal consolidation glide path outlined in the 2021-22 Budget, aiming to achieve a fiscal deficit of less than 4.5% of GDP by 2025-26, as detailed in the finance ministry’s mid-year review of receipts, expenditures, and deviations under the Fiscal Responsibility and Budget Management Act, 2003.
These statements were tabled in the Lok Sabha last week.
"The focus will be on improving the quality of public spending while strengthening the social security safety net for the underprivileged. This strategy will further reinforce the nation's macroeconomic fundamentals and ensure overall financial stability," the document stated.
The Budget for 2024-25 was presented amid global uncertainties arising from conflicts in Europe and the Middle East.
India's robust macroeconomic fundamentals have shielded the country from the challenges faced by the global economy.
"This resilience has allowed the nation to pursue growth alongside fiscal consolidation, ensuring India remains one of the fastest-growing economies globally. However, risks to growth persist," the document noted.
Total expenditure for 2024-25 was projected at approximately ₹48.21 lakh crore, with revenue and capital account expenditures estimated at ₹37.09 lakh crore and ₹11.11 lakh crore, respectively.
Of this, expenditure in the first half of FY25 amounted to ₹21.11 lakh crore, representing about 43.8% of the budget estimate (BE).
Factoring in grants for capital asset creation, the effective capital expenditure (capex) was projected at ₹15.02 lakh crore.
Gross tax revenue (GTR) was estimated at ₹38.40 lakh crore, with an implied tax-to-GDP ratio of 11.8%.
The Centre’s total non-debt receipts were projected at ₹32.07 lakh crore, including ₹25.83 lakh crore in net tax revenue, ₹5.46 lakh crore in non-tax revenue, and ₹0.78 lakh crore in miscellaneous capital receipts.
Based on these estimates, the fiscal deficit was pegged at ₹16.13 lakh crore in the 2024-25 BE, equivalent to 4.9% of GDP.
For the first half of FY25, the fiscal deficit stood at ₹4.75 lakh crore, or 29.4% of the BE.
The fiscal deficit was planned to be financed through ₹11.13 lakh crore from market borrowings (government securities and treasury bills) and the remaining ₹5 lakh crore from other sources such as the National Small Savings Fund, state provident funds, external debt, and cash balance drawdowns.
Follow us
