Fiscal Deficit of India: An update

 

• As of September 2023 (the latest data available), the fiscal deficit was Rs 7.02 lakh crore, which is equivalent to approximately 39.3% of the annual budget target for the current fiscal year (FY24).

Percentage of GDP:

• Based on the current estimates, the fiscal deficit for FY24 is expected to be 6.5% of GDP. However, it's important to note that this is a revised estimate, as the initial budget target was 5.9% of GDP.

Additionally

• The Indian government aims to bring down the fiscal deficit to 5.8% of GDP by FY25 and further to 5.1% by FY26.
• The widening fiscal deficit is a concern for some economists, as it could lead to higher inflation and interest rates.
• However, the government argues that the increased spending is necessary to support economic growth and infrastructure development.