India’s fiscal deficit for the period April-October 2023 has narrowed to ₹7.51 trillion, showing a significant improvement over the same period last year. The government has managed to bring down the deficit, which is a key indicator of fiscal health, by effectively controlling expenditure and boosting revenue collection. This reduction is seen as a positive sign of fiscal consolidation, with the deficit standing at 40.1% of the full-year target for 2023-24, compared to 45.6% in the previous year.
Source:- bbc news
The narrowing of the fiscal deficit has been driven by a stronger-than-expected growth in tax revenues, particularly from goods and services tax (GST) collections, income tax, and customs duties. These positive revenue inflows have helped offset the higher government expenditure, which includes spending on welfare schemes, subsidies, and infrastructure projects.
Source:- news 18
India’s government has been focusing on maintaining fiscal discipline while simultaneously investing in sectors such as infrastructure and social welfare. The narrowing deficit aligns with the government’s goal to bring the fiscal deficit down to 4.5% of GDP by FY2025, as outlined in the Union Budget.
The fiscal deficit reduction also reflects the government’s efforts to rein in inflation and maintain a balanced approach toward economic growth. Analysts suggest that a sustained reduction in the fiscal deficit would bolster investor confidence and help India maintain its credit ratings.
While the narrowing deficit is encouraging, experts caution that it is crucial for the government to continue managing both revenue and expenditure effectively to ensure fiscal sustainability in the long term. The government’s ability to meet its full-year fiscal deficit target will depend on maintaining revenue momentum and managing expenditure, particularly amid global economic challenges.
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