Union Budget: Govt lowers fiscal deficit target to 4.9% of GDP for FY 24-25

New Delhi: Buoyed by improvement in revenue collection, the government has lowered fiscal deficit target to 4.9 per cent for the current financial year as against 5.1 per cent estimated in February's interim Budget.

Finance Minister Nirmala Sitharaman, however, retained the fiscal deficit estimate at 4.5 per cent for 2025-26 as announced in February.

"For the year 2024-25, the total receipts other than borrowings and the total expenditure are estimated at Rs 32.07 lakh crore and Rs 48.21 lakh crore, respectively. The net tax receipts are estimated at Rs 25.83 lakh crore. The fiscal deficit is estimated at 4.9 per cent of GDP," she said, while presenting the Budget in Lok Sabha.

In absolute terms, the fiscal deficit has accordingly came down to Rs 16.14 lakh crore against Rs 16.85 lakh crore estimated earlier for the current financial year.

"The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year. The government is committed to staying the course.

"From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the central government debt will be on a declining path as a percentage of GDP," she said.

The government has also cut down its gross market borrowing target by about Rs 12,000 crore to meet the fiscal deficit, the gap between revenue receipt and expenditure.

The gross market borrowings has now revised downward to Rs 14.01 lakh crore from Rs 14.13 lakh crore estimated in February.

"The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs 14.01 lakh crore and Rs 11.63 lakh crore, respectively. Both will be less than that in 2023-24," she said.

Gross borrowing was Rs 15.43 lakh crore, the highest ever, in 2023-24.