Material revenue gains must be for the 4.5% fiscal deficit target

Moody’s Investors Service on Friday said the budget for FY24 balances the government’s commitment to longer-term fiscal sustainability against its “more immediate priority” of supporting the economy amid high inflation and weak global demand, ahead of general elections next year.
The target to narrow the deficit to 4.5% of GDP by fiscal 2025 is unlikely to be met in the absence of more material gains in revenue.
Moody’s said, “For the first time, such spending will exceed 20% of total budgeted expenditure in fiscal 2023, up from as low as 12.1% in fiscal 2020”.

This news was written by Ms Annapoorani, Research Assistant, All India Legal Forum.