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India confident of meeting fiscal deficit target, despite planned tax cuts

Economic Times

Economic Times · 6d ago

India confident of meeting fiscal deficit target, despite planned tax cuts

India is confident of achieving its fiscal deficit target of 4.4% for the current fiscal year, despite plans to reduce consumption tax. The government has strategies to counter potential revenue losses from these tax cuts, as stated by a government source. Prime Minister Narendra Modi announced significant changes to the goods and services tax (GST), aiming to make essentials and electronics cheaper. The compensation cess is to be discontinued by December.

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Nirmala Sitharaman to address RBI board on budget 2025-26, fiscal roadmap

YourStory

YourStory · 6m ago

Nirmala Sitharaman to address RBI board on budget 2025-26, fiscal roadmap

Finance Minister Nirmala Sitharaman will address the Reserve Bank of India's central board on February 8, discussing the Budget FY26, which includes income tax relief to boost demand. The post-budget meeting occurs after the RBI's Monetary Policy Committee meeting, potentially leading to a rate cut. Sitharaman aims to maintain fiscal deficit reduction and government debt on a declining GDP ratio path. The Budget introduces significant tax cuts for the middle class and proposes revised income tax slabs.

FY25 fiscal deficit on track: Touches 100.5% of revised target at Rs 15.77 lakh crore

Business Today

Business Today · 2m ago

FY25 fiscal deficit on track: Touches 100.5% of revised target at Rs 15.77 lakh crore

The fiscal deficit for FY25 reached Rs 15.77 lakh crore, achieving 100.5% of the revised target. Government expenditure was Rs 46.56 lakh crore, 98.7% of the fiscal year's budget target. Revenues totalled Rs 30.36 lakh crore, with Rs 24.99 lakh crore from taxes and Rs 5.38 lakh crore from non-tax sources. The fiscal deficit target for FY26 is set at 4.4%.

Budget Snapshot: Centre can afford to not cut its FY25 borrowing target

Money Control

Money Control · 1y ago

Budget Snapshot: Centre can afford to not cut its FY25 borrowing target

The central government in India can easily borrow from the domestic bond market to finance its fiscal deficit, especially with the unexpected increase in revenue from a large dividend payout by the Reserve Bank of India (RBI). This gives the government more flexibility for spending or potentially reducing the fiscal deficit. Some market participants suggest that the government could even bring down the fiscal deficit target further from the 5.1 percent of GDP stated in the interim budget.

Fiscal deficit down to 0.8% of FY26 target in April-May

Economic Times

Economic Times · 1m ago

Fiscal deficit down to 0.8% of FY26 target in April-May

India's fiscal deficit for the first two months of the financial year reached 0.8% of the annual target, the lowest since 1997, aided by a substantial dividend transfer from the central bank, resulting in a fiscal surplus in May. Tax revenue rose by 10%, while non-tax revenue surged by 41.8%. Capital and revenue expenditures increased significantly as well, indicating strong early fiscal performance, though expenditures are expected to rise in subsequent months.

IMF sees India meeting its FY24 deficit goal despite extra spending

Reuters · 1y ago

IMF sees India meeting its FY24 deficit goal despite extra spending

The International Monetary Fund (IMF) has stated that India can accommodate additional expenditure on subsidies and rural unemployment programs without needing to raise its fiscal deficit target of 5.9% for the current financial year. This comes as Prime Minister Narendra Modi's party faces pressure to create jobs and support farmers, potentially leading to higher expenditure than initially planned. The IMF believes that there is room within the budget to absorb these unexpected increases in expenditure.

Do bond fund investors need to change their strategy after Budget?

Money Control

Money Control · 1y ago

Do bond fund investors need to change their strategy after Budget?

On July 24, the India 10-Year Bond Yield increased to 7.09%. This rise in yield is seen as a positive for the Indian bond market as the government remains committed to reducing public debt-to-GDP ratio and fiscal deficit. In the Budget 2024, the total capital expenditure for the financial year 2025 remains unchanged at Rs 11.1 lakh crore, and the fiscal deficit target has been reduced to 4.9% from the previous estimate of 5.1%. This fiscal consolidation path is expected to create opportunities for the Reserve Bank of India to make necessary policy adjustments.

India's growth to be highest among emerging G20 nations: Moody's

YourStory

YourStory · 4m ago

India's growth to be highest among emerging G20 nations: Moody's

Moody's Ratings projects India as the fastest-growing economy among G20 nations, with growth pegged at 6.5% for the current fiscal year. This robust growth is attributed to supportive tax measures and continued monetary easing by the Reserve Bank of India. Despite global uncertainties, India is well-positioned to attract capital due to its large, domestically oriented economy and low external vulnerability. Inflation is expected to average 4.5%, while tax rebates and interest rate cuts bolster economic prospects.

The Future of India’s Economy Under Modi 3.0 - Business Byte

Business Bytes

Business Bytes · 1y ago

The Future of India’s Economy Under Modi 3.0 - Business Byte

The Indian economy has been showing resilience despite challenges posed by the COVID-19 pandemic. The country has witnessed impressive GDP growth rates for three consecutive years, with a projected 8.2% increase in the financial year 2023-24. The fiscal deficit has been well managed, with a target of 5.1% for the current fiscal year. Reforms and development are expected to continue, focusing on infrastructure, digitalization, and manufacturing. Overall, the economy is well-positioned for sustained growth under the leadership of Modi 3.0.

Centre may restrict fiscal deficit to 4.2%-4.3% of GDP

Livemint

Livemint · 2m ago

Centre may restrict fiscal deficit to 4.2%-4.3% of GDP

The Indian government is set to reduce its fiscal deficit to 4.2%-4.3% of GDP for 2025-26, surpassing the target of 4.4%. This improvement is attributed to higher dividends from the Reserve Bank of India and state-run enterprises. The narrowed revenue-expenditure gap will allow the government to maintain capital spending, sustaining economic growth. Enhanced fiscal space is anticipated due to increased transfers to the Centre, including a record ₹2.7 trillion from the RBI.

No immediate upgrade of India's sovereign rating: Moody’s

YourStory

YourStory · 6m ago

No immediate upgrade of India's sovereign rating: Moody’s

Moody's Ratings has decided not to upgrade India's sovereign rating immediately, despite the government's prudent fiscal management and projected deficit reduction in the Budget. India's current rating of "Baa3" with a stable outlook reflects concerns over its debt burden and debt servicing costs. While Moody's acknowledges India's fiscal and inflation control strides, further reduction in debt burden and enhanced revenue measures are essential for a rating upgrade. Despite challenges, India retains a favorable growth outlook among G20 economies.

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