India’s fiscal deficit target has been cut to 4.9% of the gross domestic product for the financial year 2024-’25 from 5.1% estimated in the interim Budget in February, Union Finance Minister Nirmala Sitharaman said on Tuesday.

There is a fiscal deficit when the government’s expenditure is more than the revenue it generates in a given financial year.

The fiscal deficit was 5.6% of the gross domestic product in the financial year 2023-’24.

The gross borrowings are estimated to be Rs 14.01 lakh crore and the net market borrowings through dated securities are expected to be Rs 11.63 lakh crore, Sitharaman said in her Union Budget speech on Tuesday.

Sitharaman said that the government was committed to staying on the course of fiscal consolidation with the fiscal deficit projected below 4.5% of the gross domestic product in 2025-’26, and with sustained reductions thereafter.

“The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach the deficit below 4.5% next year,” the minister said. “The government is committed to stay the course. From 2026-’27 onwards our endeavour will be to keep fiscal deficit each year such that the central government’s debt will be on a declining path as percentage of GDP [gross domestic product].”

Also read: Budget 2024: Financial support, infrastructure projects announced for Bihar and Andhra Pradesh