SBI Research Urges Modi Govt to Prioritize Fiscal Prudence in Upcoming Budget
Ahead of the 2024-25 budget presentation, SBI Research advises the government to focus on fiscal prudence and continue fiscal consolidation. The suggested fiscal deficit target is 4.9%. Positive GST revenue and higher PSU dividends may help achieve this goal, reducing market borrowing and keeping yield curves stable.
- Country:
- India
As the Modi government prepares to table its anticipated 2024-25 budget on July 23, SBI Research has recommended a focused approach on fiscal prudence and consolidation. The government's fiscal deficit target for the financial year 2025-26 aims to drop below 4.5% of GDP.
SBI Research suggests setting a fiscal deficit target of 4.9% but advises against becoming overly concerned with the fiscal stance. The fiscal deficit for 2023-24 was initially set at 5.9% of GDP and later revised to 5.8%.
The upcoming budget, expected to benefit from robust GST revenues and higher PSU dividends, may enable market borrowing reduction and a stable yield curve. This will be Finance Minister Nirmala Sitharaman's sixth budget, surpassing former Prime Minister Morarji Desai's record.
(With inputs from agencies.)
ALSO READ
Finance Minister Nirmala Sitharaman to Attend AIIB Annual Meeting in Uzbekistan
Nirmala Sitharaman's Uzbekistan Visit to Strengthen Bilateral Ties and Attend AIIB Annual Meeting
Nirmala Sitharaman Urges AIIB to Expand Non-Lending Services
Karnataka High Court Pauses Investigation on FIR Against Nirmala Sitharaman
Karnataka High Court Halts Probe Against Nirmala Sitharaman in Electoral Bond Case