New Delhi: During the Union Budget 2023 announcement Finance Minister Nirmala Sitharaman revealed that the fiscal deficit target for the year 2024 25 is set at 5.1% of the Gross Domestic Product (GDP). For the fiscal year, 2023 24 the initial projection of a fiscal deficit of 5.9% was revised downwards to 5.8%.
The fiscal deficit, which indicates the gap between government revenue and expenditure is used as a measure of government borrowings. The government aims to bring down the deficit to below 4.5% of GDP by the financial year 2025 26.
In a relief for citizens there will be no changes or increases in tax burden according to Sitharaman. She stated, "I do not propose any alterations in taxation and intend to maintain existing tax rates for both indirect taxes, including import duties." However she did mention that certain tax benefits for start ups and investments by wealth or pension funds would expire but proposed extending their validity until March 31 2025.
Furthermore the government has proposed an increase of 11.1% in capital expenditure outlay amounting to Rs 11.11 lakh crore, for the year 2024 25.
Investing in capital expenditure, which involves acquiring term physical assets plays a crucial role in fostering growth potential, job creation attracting private investments and mitigating global uncertainties.
The budget presented today is designed to meet the needs until a new government takes office after the Lok Sabha elections. Subsequently a comprehensive budget is expected to be presented in July.
Nirmala Sitharamans presentation of this budget matches the record set by former Prime Minister Morarji Desai, who served as finance minister and presented five annual budgets and one interim budget between 1959 and 1964.
The Budget Session of Parliament commenced with President Droupadi Murmu addressing a sitting of Lok Sabha and Rajya Sabha. The President highlighted the significance of 2023 for the nation underscoring its momentum as the fastest growing major economy.
According to a review report by the Ministry of Finance Indias economy is projected to grow at 7% during the financial year 2024 25 starting from April. The countrys economy witnessed growth rates of 7.2% in 2022 23 and 8.7% in 2021 22. It is anticipated that India will maintain its status as the growing major economy with an expected growth rate of 7.3%, for this current financial year, i.e. 2023 24.
