Wed Dec 25 07:20:29 UTC 2024: ## India’s 2025-26 Budget to Prioritize Quality Spending and Fiscal Consolidation
**New Delhi, December 25, 2024** – Finance Minister Nirmala Sitharaman will present the Union Budget for 2025-26 on February 1, 2025. The budget will focus on improving the quality of public spending and strengthening the social security net, while aiming to reduce the fiscal deficit to 4.5% of the GDP.
According to a Finance Ministry document, the government remains committed to its fiscal consolidation path, aiming for a deficit lower than 4.5% by FY 2025-26. This commitment follows the glide path announced in the FY 2021-22 budget. The ministry emphasized that this strategy will bolster macroeconomic fundamentals and ensure financial stability.
The document highlighted that India’s robust macroeconomic fundamentals have shielded the nation from global economic uncertainties stemming from ongoing conflicts in Europe and the Middle East, allowing for continued growth alongside fiscal consolidation. However, the ministry acknowledged that risks to growth persist.
The Budget Estimate (BE) for 2024-25 projected a total expenditure of ₹48.21 lakh crore, with ₹37.09 lakh crore allocated for revenue and ₹11.11 lakh crore for capital expenditure. The projected fiscal deficit for 2024-25 stands at ₹16.13 lakh crore (4.9% of GDP). Approximately 43.8% of the BE expenditure was incurred in the first half of FY25. The government plans to finance the deficit through market borrowing (₹11.13 lakh crore) and other sources (₹5 lakh crore). Gross Tax Revenue (GTR) is estimated at ₹38.40 lakh crore, representing a tax-GDP ratio of 11.8%.
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