Aims to cut fiscal deficit to 4.5% in FY26

New Delhi

The government will continue its focus on improving quality spending, strengthening the social security net and bring down the fiscal deficit to 4.5 per cent of the GDP in FY26, a finance ministry document said.

Finance Minister Nirmala Sitharaman is schedule to present the Budget for 2025-26 in Parliament on February 1.

The Union government is committed to pursuing the glide path of fiscal consolidation as announced in the Budget for FY 2021-22 and to attain a level of fiscal deficit lower than 4.5 per cent of GDP by FY 2025-26, according to finance ministry statements on the half yearly review of the trends in receipts and expenditure and deviation in meeting the obligations of the government under the Fiscal Responsibility and Budget Management Act, 2003.

The statements were tabled in the Lok Sabha last week.

"The thrust will be on improving the quality of public spending, while at the same time, strengthening the social security net for the poor and needy. This approach would help further strengthen the nation's macro-economic fundamentals and ensure overall financial stability," it said.

According to the statements, the Budget 2024-25 was presented in the backdrop of global uncertainties caused by the wars in Europe and the Middle East. India's sound macro-economic fundamentals have cushioned the country from the vagaries afflicting the global economy.

"It has also helped the nation pursue growth with fiscal consolidation. As a result, India retains its pride of place as one of the fastest growing economies in the world. However, risks to growth still remain," it said. Total expenditure was estimated at about Rs 48.21 lakh crore, of which, expenditure on revenue account and capital account were estimated at about Rs 37.09 lakh crore and Rs 11.11 lakh crore, respectively, as per the Budget Estimate (BE) of 2024-25.