The announcement is in line with market expectations.
Presenting the Union Budget for 2024-25, Finance Minister Nirmala Sitharaman on Tuesday announced that the fiscal deficit for the year is estimated at 4.9 per cent of GDP. This is lower than the figure of 5.1 per cent that the Union government had targeted in the interim budget, presented before the Lok Sabha elections.
The announcement is in line with the expectations of the markets, which were hoping that the finance minister would keep the Union government on the fiscal glide path. Ms Sitharaman also announced that the government aims to reach a fiscal deficit - which is the difference between the government's total revenue and expenditure - of 4.5 per cent in 2025-26.
For FY 25, the finance minister said gross and net market borrowing is expected to be Rs 14.01 lakh crore and Rs 11.63 lakh crore respectively.
"The fiscal consolidation path announced by me in 2021 has served our economy very well and we aim to reach the deficit below 4.5 per cent next year," Ms Sitharaman said.
"The government is committed to stay the course. From 2026-27 onwards, our endeavour will be to keep fiscal deficit each year such that the central government's debt will be on a declining path as a percentage of GDP," the finance minister added.
Ms Sitharaman has set a record this year by presenting her seventh successive Union Budget, the most by an Indian finance minister.