union budget 2024: Under the leadership of the Ministry of Finance of India, Nirmala Sitharaman The Narendra Modi government has consistently emphasized fiscal prudence as a top priority. The target is to bring the fiscal deficit to 4.5 percent by fiscal year 2026.
Analysts expect Sitharaman to maintain BJP government’s focus on infrastructure spending on February 1 (interim) budget 2024), which aims to reduce the fiscal deficit for the current financial year from the targeted 5.9 percent of GDP.
According to ET, analysts suggest that the Modi government’s optimistic outlook for re-election in April-May 2024 has enabled it to avoid populist measures. Instead, the government is focusing on infrastructure projects like roads and power plants. According to the recently released first advance estimates, the government expects the Indian economy to grow by 7.3 percent for the current financial year. Analysts say achieving a growth rate of more than 7 per cent for the third consecutive year, especially in the current global environment, will help Modi garner another mandate.
In FY24, government spending is estimated to grow by around 4 per cent year-on-year, compared to a minimal growth of 0.1 per cent in the previous fiscal year. Concurrently, private investment is projected to grow by 10.3 percent, slightly lower than the 11.4 percent growth seen in the previous year, the data indicated.
Earlier this week, ETNow reported that the government may reduce the budget deficit target for FY25 to 5.2 per cent of GDP.
Fiscal deficit is the difference between the expenditure and revenue of the government, which is an important indicator of the economic stability and health of the country.
Analysts expect Sitharaman to maintain BJP government’s focus on infrastructure spending on February 1 (interim) budget 2024), which aims to reduce the fiscal deficit for the current financial year from the targeted 5.9 percent of GDP.
According to ET, analysts suggest that the Modi government’s optimistic outlook for re-election in April-May 2024 has enabled it to avoid populist measures. Instead, the government is focusing on infrastructure projects like roads and power plants. According to the recently released first advance estimates, the government expects the Indian economy to grow by 7.3 percent for the current financial year. Analysts say achieving a growth rate of more than 7 per cent for the third consecutive year, especially in the current global environment, will help Modi garner another mandate.
In FY24, government spending is estimated to grow by around 4 per cent year-on-year, compared to a minimal growth of 0.1 per cent in the previous fiscal year. Concurrently, private investment is projected to grow by 10.3 percent, slightly lower than the 11.4 percent growth seen in the previous year, the data indicated.
Earlier this week, ETNow reported that the government may reduce the budget deficit target for FY25 to 5.2 per cent of GDP.
Fiscal deficit is the difference between the expenditure and revenue of the government, which is an important indicator of the economic stability and health of the country.
Nevertheless, some analysts have expressed concerns about rising government spending on capital expenditure (capex), posing risks to the country’s fiscal deficit and debt. This, in turn, is expected to keep interest rates higher. Sitharaman allocated a record Rs 10 lakh crore for capital expenditure in the FY 2024 budget.
The government’s fiscal deficit reached Rs 9.06 lakh crore by the end of November, equivalent to 50.7 per cent of the full year’s budget estimate. The deficit in the same period last year was 58.9 percent more than the budget estimate for FY 2023. In absolute terms, the fiscal deficit for the April-October period of 2023-24 stood at Rs 9,06,584 crore.