Confident of reducing fiscal deficit to 4.5% of GDP by FY26: Exp secy


PTI, Feb 7, 2021, 12:44 PM IST

Source: Facebook

New Delhi: The government is confident of lowering the fiscal deficit to 4.5 per cent of GDP by 2025-26 fiscal, considering a nominal GDP growth of 10 per cent every year, Expenditure Secretary T V Somanathan has said.

India has exceeded its fiscal deficit target of 3.5 per cent in the current fiscal by a wide margin due to higher spendings to stimulate the economy amid the pandemic. The fiscal deficit — the excess of government expenditure over its revenues — has been pegged at 9.5 per cent of the gross domestic product (GDP) in the current fiscal ending March 31, as per the revised estimate.

For the next 2021-22 fiscal, the deficit has been pegged at 6.8 per cent of GDP, which will be further lowered to 4.5 per cent by the fiscal ending March 31, 2026.

“We are very serious about bringing it (deficit) down. 9.5 per cent to 6.8 per cent is very much achievable and after that if you look at 10 per cent (nominal) growth per annum, if you look at a tax buoyancy of 1.1 per cent and if you look at the fact that such extraordinary expenses will not be there in the future years, every year cannot be a COVID year, I think we are very confident of reaching below 4.5 per cent,” Somanathan told PTI.

He said the fiscal deficit target has been set keeping in mind the estimate of a 5-6 per cent real GDP growth over next four years, while nominal GDP will be at least 44 per cent higher than what it is today.

“Let us assume (real GDP) growth to be 5-6 per cent, and inflation at 4-5 per cent, we will get to 10 per cent (nominal growth). Most likely we will get to 11 per cent (nominal growth). So 44 per cent growth in GDP denominator is almost certain. So on that GDP our deficit will be 4.5 per cent. I think we are quite confident we will reach it,” he said.

In its post budget commentary, S&P Global Ratings had said India’s budget for the next fiscal is an effort of the government to shore up economic recovery, but fiscal consolidation would pose a stout challenge to policymakers going forward.

“The prospect of consolidation from these heights, while maintaining a significant degree of support for the economy, poses a stout challenge to India’s policymakers,” S&P had said.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Maharashtra Polls: Eknath Shinde targets Uddhav for `giving up’ Bal Thackeray’s principles for power

Will appear before Lokayukta for questioning in MUDA case, says CM Siddaramaiah

Lies have short life, Cong’s ‘fake’ narrative smashed: Fadnavis

Temple idols found desecrated in Hyderabad, case registered

SC junks plea against quashing of LOC issued to ex-house help of Sushant Singh Rajput

JPC chairman Jagdambika Pal to visit K’taka on Nov 7 to meet farmers protesting Waqf notices

Indian boxer Mandeep Jangra wins WBF’s world title

Related Articles More

CBDT allows tax officials to waive or reduce interest due from assessee

Markets fall in early trade amid unabated foreign fund outflows

New software for fast-tracking project approvals: Karnataka Minister Patil

In-flight passengers can access WiFi services only when allowed, say new rules

SEBI mulls separation of non-regulated activities; ‘cross-default’ definition for debenture trustees

MUST WATCH

Gho Pooja in Deepavali Festival

Melukote Deepavali

Ganapathi Co-operative Society Ltd

Udayavani Chinnara Banna 2024

Annapoorna Aahar | Food Places In Mysore


Latest Additions

Davanagere: Man murdered by relative for insurance money; 4 arrested within 24 hours

Heroin worth Rs 3.5 crore recovered in police raid in Delhi, 2 arrested

Govt clerk found dead in Tahsildar’s chamber, FIR filed against minister’s PA, 2 others

Treated Muslims like fuel for ‘lantern’: Prashant Kishor targets Lalu, asks upper castes to stay away from Nitish

MP Brijesh Chowta urges Kerala CM for strict action against attack on Edneer Swamiji’s vehicle

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.