FM Sitharaman cuts fiscal deficit to 4.4 per cent of GDP

IANS February 1, 2025 217 views

Finance Minister Nirmala Sitharaman has presented a progressive budget that aims to balance economic growth with fiscal discipline. The budget targets a reduced fiscal deficit of 4.4% and emphasizes employment generation through focus on agriculture and rural sectors. Net market borrowing has been strategically set at Rs 11.54 crore, demonstrating careful financial planning. The overall approach signals a commitment to sustainable economic development while maintaining financial stability.

"Our endeavour will be to keep the fiscal deficit each year such that the Central government debt remains on a declining path" - Nirmala Sitharaman
FM Sitharaman cuts fiscal deficit to 4.4 per cent of GDP
New Delhi, Feb1: Finance Minister Nirmala Sitharaman on Saturday presented the Budget 2025-26 in Parliament which aims to give a big push to employment-led growth with its focus on the agricultural and rural sector, MSMEs, and exports, while sticking to the fiscal consolidation path to ensure stability in the economy.

Key Points

1

Fiscal deficit targeted at 4.4% of GDP for 2025-26

2

Net market borrowing fixed at Rs 11.54 crore

3

Government focuses on agricultural and rural sector growth

She has kept the budget deficit target on a declining path to 4.4 per cent of GDP in 2025-26 from 4.8 per cent of GDP in 2024-25.

The net market borrowing for the budget has been fixed at Rs 11.54 crore while the rest of the funds will come from small savings schemes, the Finance Minister said.

The government's gross borrowing target for FY26 was revised upwards by 5.7 per cent to Rs 14.82 lakh crore. Earlier, it was set at Rs 14.01 lakh crore for FY25.

"In the July Budget, I committed to staying the course for fiscal consolidation... Our endeavour will be to keep the fiscal deficit each year such that the Central government debt remains on a declining path as a percentage of the GDP," FM Sitharaman said.

"Coming to 2025-26, the total receipts other than borrowings and the total expenditure are estimated at Rs 34.96 lakh crore and Rs 50.65 lakh crore, respectively. The net tax receipts are estimated at Rs 28.37 lakh crore. The fiscal deficit is estimated to be 4.4 per cent of GDP," the Finance Minister added.

In the FY'25 Budget, the government projected gross tax revenue at Rs 38.40 lakh crore, marking an 11.72 per cent increase from FY'24. This includes Rs 22.07 lakh crore from direct taxes (personal income and corporate tax) and Rs 16.33 lakh crore from indirect taxes (customs, excise, GST).

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