New Delhi:In a clear sign of confidence before the crucial general election due in next few months, finance minister Nirmala Sitharaman stayed on the course of fiscal consolidation rather than presenting a populist budget containing schemes that may have further unsettled the health of the government finances, a move that surprised many analysts.
In her budget speech presented last year, Finance Minister Nirmala Sitharaman had estimated that the fiscal deficit for the current financial year would be at around 17.87 lakh crore or 5.9 percent of the country’s gross domestic product (GDP). However, as per the revised estimates for the current financial year, the finance minister was able to keep the fiscal deficit for the current year below the budget estimates, both in terms of absolute numbers and as a percentage of the GDP.
The budget data showed that the fiscal deficit would be at around Rs 17.35 lakh crore, 5.8 percent of the GDP. In terms of absolute numbers, it is almost at the same level of fiscal deficit during FY 2022-23 when it was Rs 17.37 lakh crore.
Devendra Kumar Pant, Chief Economist & Senior Director– Public Finance, India Ratings and Research Comment, said there are two broad themes of this budget are fiscal consolidation and stepping up focus on agriculture and rural areas.
“The first impression from the budget speech and fiscal deficit numbers for FY24 and FY25 suggests that the government is serious about achieving the fiscal consolidation path of 4.5% fiscal deficit by FY26,” Pant said in a statement sent to ETV Bharat.
The economist said it suggests that these are measures to course correct to some extent the differential benefit of the ongoing economic growth which is tilted in favor of households of upper income brackets and urban areas.