‘Will meet fiscal deficit target of 4.4% for FY26’

Finance Minister Nirmala Sitharaman has expressed confidence that revenue buoyancy driven by spurt in consumption will take care of the estimated GST shortfall of Rs 48,000 crore following reduction in tax rates on a host of items, and hence there will be no impact on public finances but definitely bolster GDP growth.

She also emphasised that consumption boost to be provided by landmark GST reform and better-than-expected first quarter GDP growth number may help in exceeding the projected pace of 6.3-6.8 per cent for FY26.

Asked about impact of GST rate cuts on fiscal deficit, Sitharaman said, Rs 48,000 crore financial implication is a static number based on a base year, but when it gets implemented, base situation changes. 

"So, I think the consumption spurt from September 22 will increase income buoyancy. To a large extent, this Rs 48,000 crore amount we will be able to make it up this year itself. So I don't see an impact on my fiscal deficit or my fiscal management. I will stick to my numbers (of 4.4 per cent of GDP)". Sitharaman told PTI in an interview.

The Centre estimates the fiscal deficit during 2025-26 at 4.4 per cent of the GDP, or Rs 15.69 lakh crore.

Govt keeping 'good watch' on rupee: Sitharaman

Sitharaman has said that the government is keeping a 'good watch' on exchange rates, stressing that besides rupee several other currencies have depreciated against the US dollar.

"The rupee slide is largely against the dollar, not against any other currencies. That's also because of the way globally, the dollar has strengthened," she said when asked if the slide of rupee against greenback is a concern.

"This is not the case only with rupee versus dollar, it's the case with many other currencies versus the dollar. So we are keeping a good watch on this," she told PTI in an interview.

The rupee plummeted to a record low and closed at 88.27 against dollar after touching an intra-day low of 88.38 on Friday. The fall came amid concerns over US tariffs, while intervention by the Reserve Bank of India through state-run banks helped limit further losses. The steep tariff of 50 per cent imposed by the US on Indian goods took effect on August 27. The tariffs - among the highest in the world - include a 25 per cent penalty for buying crude oil from Russia.

'Ek baar aap GST dekh lo'

'Ek baar aap GST dekh lo!' - Prime Minister Narendra Modi's gentle nudge to Finance Minister Nirmala Sitharaman in December last year sparked the beginning of a mammoth exercise to overhaul the tangled goods and services tax regime. And the final outcome is a significantly simplified system with lower tax rates and easier compliance for businesses.

 Sitharaman, who, along with her team, began work to identify anomalies in the present four-tier structure and compliance issues faced by businesses, was once again reminded by the Prime Minister when she was preparing the Budget for the 2025-26 fiscal year. 'Aap GST ke upar kar rahi ho na kaam?' Modi had inquired.

Her discussion with the Prime Minister led Sitharaman to begin work on reviewing everything in GST - not just rates and tax slabs but how to make the regime more friendly for businesses, particularly small and medium businesses.

In an interview with PTI, Sitharaman recalled the parallel works that happened - from overhauling the indirect tax regime to ensuring the backend software is ready to implement the massive change in the offing.