Finance Minister Nirmala Sitharaman is scheduled to present the 2025-26 budget in Parliament on February 1, 2025. File | Photo Courtesy: Nagara Gopal
It is mentioned in the document of the Ministry of Finance that the government will focus on improving the quality of spending, strengthening the social security network and reducing the financial deficit to 4.5 percent of the gross domestic product in the fiscal year 2016.
Finance Minister Nirmala Sitharaman is scheduled to present the 2025-26 budget in Parliament on February 1, 2025.
The central government is committed to follow the glide path of fiscal consolidation as announced in the budget for fiscal year 2021-22 and reach a fiscal deficit level of less than 4.5 percent of GDP by fiscal year 2025-26, the finance ministry said in a statement. Half-yearly review of trends in receipts and expenditure and deviations in meeting obligations under the Fiscal Responsibility and Budget Management Act, 2003.
The statements were tabled in the Lok Sabha last week.
“The emphasis will be on improving the quality of public expenditure, while strengthening the social safety net for the poor and needy. This approach will help strengthen the nation’s macroeconomic fundamentals and ensure overall fiscal stability,” it said.
The statement said that the budget for 2024-25 was presented against the backdrop of global uncertainty arising from the wars in Europe and the Middle East.
India’s strong macroeconomic fundamentals have shielded the country from uncertainties affecting the global economy.
“This has helped the nation grow with fiscal consolidation. As a result, India has maintained its pride of place as the world’s fastest growing economy. However, risks to growth still remain,” it said.
The total expenditure was estimated at around ₹ 48.21 lakh crore, of which, as per the Budget Estimates (BE) for 2024-25, revenue account and capital account were estimated at ₹ 37.09 lakh crore and ₹ 11.11 lakh crore, respectively.
As against total expenditure of ₹48.21 lakh crore, expenditure in the first half of FY25 was ₹21.11 lakh crore or about 43.8% of BE.
Taking into account the subsidy for creation of capital assets, effective capital expenditure (Capex) was estimated at Rs 15.02 lakh crore.
Gross Tax Revenue (GTR) was estimated at around ₹38.40 lakh crore with an implied tax-GDP ratio of 11.8%.
The Centre’s total non-debt receipts were estimated at around ₹ 32.07 lakh crore. This included tax revenue (total at the Centre) of around ₹ 25.83 lakh crore, non-tax revenue of around ₹ 5.46 lakh crore, and miscellaneous capital receipts of ₹ 0.78 lakh crore.
With the above estimates of receipts and expenditure, the fiscal deficit was estimated at around ₹ 16.13 lakh crore or 4.9% of GDP in BE 2024-25.
In H1 of FY25, fiscal deficit is estimated at ₹ 4.75 lakh crore, or about 29.4% of BE.
The fiscal deficit was planned to be financed by raising ₹ 11.13 lakh crore from the market (G-sec + T-Bills), and the remaining amount of ₹ 5 lakh crore from other sources, such as NSSF, State Provident Fund, external debt, cash balance, etc.
published – December 25, 2024 at 12:50 pm IST