Wednesday, February 19, 2025
spot_img
HomeNationUnion Budget : Govt To Focus On Fiscal Consolidation & Growth

Union Budget : Govt To Focus On Fiscal Consolidation & Growth

New Delhi [India]: The Government of India is expected to prioritize fiscal consolidation and economic growth in the upcoming Union Budget 2025, according to a research report by Union Bank of India (UBI).

Key Fiscal Deficit Targets for FY26

The report projects that the government aims to reduce the fiscal deficit to 4.5% of GDP in FY26, down from an estimated 4.8% in FY25.

📌 Fiscal Deficit Projections:
✅ FY25 (Revised Estimate): 4.8% of GDP (~₹15.7 lakh crore)
✅ FY26 (Target): 4.5% of GDP (~₹16.2 lakh crore)

The fiscal target aligns with the government’s macroeconomic stability plan, aiming to keep public debt manageable while ensuring investor confidence.

Fiscal Consolidation Amid Economic Challenges

The fiscal deficit in FY25 has been under pressure due to:
🔺 Lower-than-expected capital expenditure (capex)
🔺 Rising subsidy burdens caused by geo-political tensions
🔺 Slowing revenue growth

The government has faced delays in infrastructure spending, affecting overall economic growth. However, fiscal tightening in FY26 is expected to rely more on reducing expenditure rather than significantly boosting revenue collection.

Balancing Fiscal Prudence with Growth Measures

Despite a focus on fiscal discipline, the Union Budget 2024 is likely to include targeted economic reforms to sustain growth:
Potential tax cuts for middle-class taxpayers 💰
Higher capital expenditure (Capex) allocations for infrastructure projects 🏗️
Sector-specific incentives (e.g., MSMEs, renewable energy, tourism) 🌱🚀

The government’s fiscal roadmap has received mixed reactions. While some experts advocate for more aggressive stimulus measures, the government remains committed to balancing growth with fiscal prudence.

Upcoming Monetary Policy & Economic Outlook

The Reserve Bank of India (RBI) is also expected to take liquidity and interest rate measures in the coming weeks, shaping India’s economic trajectory post-budget.

With the upcoming Union Budget on February 1 and RBI’s monetary policy meeting on February 7, the next few weeks will be critical in determining India’s economic recovery path.

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments