In an ambitious decision, looking at the stressed fiscal scenario, the government has set a target to reduce fiscal deficit to 6.4 per cent of GDP in 2022-23 from the estimated 6.9 per cent in the current financial year, finance minister Nirmala Sitharaman said on Tuesday, while presenting the union budget.
"The fiscal deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is consistent with the broad path of fiscal consolidation announced by me last year to reach a fiscal deficit level below 4.5 per cent by 2025-26," Ms Sitharaman said in her budget speech.
For the current financial year, the fiscal deficit has been revised upward at 6.9 per cent of GDP as against 6.8 per cent projected in the budget estimates.
Under such a scenario, when the government had to upwardly revise its fiscal deficit for the current financial year, it would be a challenging task to cut down on its expenses as fiscal deficit is basically the difference between the income and expenses of the government.
The fiscal deficit of the government for 2022-23 is estimated to be Rs 16,61,196 crore. The revised estimates for 2021-22 indicate a fiscal deficit of Rs 15,91,089 crore as against the budget estimates of Rs 15, 06,812 crore.
The Finance Minister stated that the outlay for capital expenditure in the Union Budget is once again being stepped up sharply by 35.4 per cent from Rs 5.54 lakh crore in the current year to Rs 7.50 lakh crore in 2022-23.
"This has increased to more than 2.2 times the expenditure of 2019-20. This outlay in 2022-23 will be 2.9 per cent of GDP," she added.
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