Budget 2024: Fiscal deficit at 5.8% in FY24; FY25 projection at 5.1%

Finance Minister Nirmala Sitharaman said the revised estimate of the fiscal deficit for FY24 stands at 5.8 per cent while presenting the Interim Budget 2024-25.

“The Revised Estimate of the fiscal deficit is 5.8 per cent of GDP, improving on the Budget Estimate, notwithstanding moderation in the nominal growth estimates,” Sitharaman said.

She went on to say that the government is committed to reducing the fiscal deficit below 4.5 per cent by 2025-26, adding that the fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP.

"This is anti-inflationary budget in an election year as the fiscal deficit is reduced from 5.8 percent to 5.1 percent. The finance ministry is clearly aiming for rating upgrade with aggressive fiscal deficit reduction target as we are at investment grade rating," said from Murthy Nagarajan, Head-Fixed Income, Tata Asset Management.

Meanwhile, Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet, said the reduced fiscal deficit projection at 5.1 per cent of GDP in FY25, down from 5.8 per cent in FY24, will create room for increased private sector borrowings.

"The path to fiscal consolidation with fiscal deficit pegged at 5.1 per cent shows government commitment to its promises . Overall a fascinating budget covering all sections of society, especially towards the research and innovation initiatives by our youth," said Pralay Mondal, MD & CEO of CSB Bank.