Finance Minister Pegs Fiscal Deficit Target at 4.9% for 2024-25

Union Finance Minister Nirmala Sitharaman sets the fiscal deficit target at 4.9% of GDP for the 2024-25 Union Budget. She also outlined plans to reduce the fiscal deficit below 4.5% by 2025-26 and maintain a downward trajectory thereafter.

Union Finance Minister Nirmala Sitharaman, while presenting the 2024-25 Union Budget, announced a fiscal deficit target of 4.9% of the gross domestic product (GDP). This adjustment follows her earlier target of 5.1% of GDP in the Interim Budget presented in February.

For the fiscal year 2023-24, the government initially set a deficit target of 5.9% of GDP but later revised it to 5.8%. The fiscal deficit, which represents the gap between total revenue and expenditure, indicates the borrowing needs of the government.

The Finance Minister stressed the government's commitment to reducing the fiscal deficit below 4.5% of GDP by 2025-26. She also highlighted that from 2026-27 onward, the goal is to continue lowering the deficit to ensure the central government's debt remains on a declining path as a percentage of GDP.

(With inputs from agencies.)