India’s economy remains bright. This is what economists have been saying for the past two years. In her interim budget speech, Finance Minister Nirmala Sitharaman gave us some numbers to back up these claims.
India has every reason to smile as it enters the election season. On Thursday, Sitharaman said there is macroeconomic stability, investments are strong and the economy is doing well.
People are doing better because average real incomes have increased by 50 percent, she said. Inflation was moderate and there was efficient and timely delivery of programs and large projects.
Overall, it looks good. The economy performed better than estimated in Budget 2023. We explain.
What are Budget Estimates and Revised Estimates?
During the presentation of the budget, the government lays out the estimated revenue and expenditure for the coming financial year. Appropriation of allocated funds for work and other activities and ministries.
These numbers are not final commitments and changes, so the government provides revised estimates. Any additional projections made in the Revised Estimates require the approval of expenditure by Parliament.
Budget estimates represent the government’s ambitions, and revised estimates show what spending will look like. According to a report in Business Standard.
Also Read: Big gains from Budget: Nirmala Sitharaman on Taxation, Economy and Fiscal Deficit
What were the revised estimates for FY 2023-24?
The revised estimate of total receipts excluding borrowing is Rs 27.56 lakh crore, of which tax revenue is Rs 23.24 lakh crore. As per the budget speech, the revised estimate of the total expenditure is Rs 44.90 lakh crore.
Revenue inflows at Rs 30.03 lakh crore are expected to be higher than the budget estimate, reflecting strong growth and formalization in the economy.
The revised estimate of the fiscal deficit is 5.8 per cent of GDP, better than the budget estimate, despite moderation in nominal growth estimates, Sitharaman said in his speech.
What are the predictions for FY 2024-25?
For the coming financial year, total receipts and total expenditure, excluding loans, are estimated at Rs 30.80 lakh crore and Rs 47.66 lakh crore, respectively. The tax revenue is Rs 20.02 lakh crore.
In his speech, the finance minister said that the 50-year interest-free loan scheme for capital expenditure of the states will continue this year at a cost of Rs 1.3 lakh crore.
“We are continuing on the path of fiscal consolidation announced in my Budget speech of 2021-22 to bring the fiscal deficit below 4.5 per cent by 2025-26. The fiscal deficit in 2024-25 is estimated at 5.1 per cent of GDP and is following that path,” Sitharaman said.
This implies that the government should reduce it by 200 basis points over the next two years. In other words, from 5.8 percent of GDP in 2023-24 to less than four percent of GDP in 2025-26. Indian Express.
A fiscal deficit is the amount the government borrows when it cannot cover all of its expenditures with its revenues. Every year the fiscal deficit adds to the government’s debt.
The high fiscal deficit is not a promising sign and the finance ministry is trying to reduce it.
In his speech, FM announced the FY26 target at 4.5 percent of GDP.
Gross and net market lending through dated securities during 2024-25 is Rs 14.13 lakh crore and Rs 11.75 lakh crore, respectively. Both will be lower than that in 2023-24.
Now that private investments are picking up, according to this year’s budget speech, lower borrowing by the central government will facilitate greater credit availability to the private sector.
What do the experts say?
Rumki Majumdar, economist at Deloitte India, said the government is being prudent with spending, giving it confidence that it will meet its target of limiting the fiscal deficit to 4.5 percent of GDP in the next two years. mint.
“Reassurance from the government will help investor confidence and ensure that sovereign yields are kept within limits, which is important for financial stability,” she added. “Furthermore, a controlled fiscal deficit reduces inflationary pressures and increases private borrowing space, thereby spurring private investment.”
So what does FM have to say about the road ahead?
The next five years will see unprecedented economic growth in India.
India’s economy, which is the fastest growing among major countries, is going through profound changes and the government aims to make the country “vakasita” (developed) by 2047, she told Parliament.
“The next five years will be the golden moments of unprecedented development and the realization of the dream of a developed India by 2047,” declared the FM.
with inputs from agencies
(This report and images is auto-generated from syndicated feeds. TimesMasala staff are not responsible for the generation of this content.)
