Government says committed to lowering fiscal deficit to below 4.5% by 2025-26

To achieve saturation under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY), the Finance Ministry on Saturday launched a three-month campaign starting April 1.

The government is committed to lowering its fiscal deficit to less than 4.5 percent of the gross domestic product by the financial year 2025-26, minister of state for finance Pankaj Chaudhary said August 1.

“In line with the commitment made in the budget for FY 2021-22, the government is committed to achieve fiscal consolidation to attain a level of fiscal deficit lower than 4.5 per cent of GDP by FY 2025-26,” Chaudhary said in a written response in the Lok Sabha.

The Centre’s fiscal deficit ballooned and revenue took a hit in the wake of the coronavirus pandemic.

While the economy is back on tracks and the deficit has come off the highs, it still remains elevated.

The Centre is set to borrow a record Rs 14.95 lakh crore on a gross basis from the market through bonds in this financial year. It has targeted a fiscal deficit of 6.4 percent.

The fiscal deficit was 6.7 percent of the GDP in FY22, 20 basis points lower than the revised target of 6.9 percent. One basis point is one-hundredth of a percentage point.

The fiscal deficit stood at Rs 3.52 lakh crore in April-June, accounting for 21.2 percent of the full-year target, data released on July 29 by the Controller General of Accounts showed.

The widening of the fiscal deficit in June— a deficit of Rs 1.48 lakh crore—is partially due to a cut in the excise duty on petrol and diesel in late May.

“Increasing the buoyancy of tax revenue through improved compliance, mobilisation of resources through monetisation of assets, improving efficiency and effectiveness of public expenditure, etc are the important measures initiated by the Government to reduce the fiscal deficit and the debt,” Chaudhary said.