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Govt confident of meeting FY24 fiscal deficit target, committed to lowering it to 4.5% by FY26: Ajay Seth

The government is confident of achieving its FY24 fiscal-deficit target of 5.9% and committed to lowering the fiscal deficit to 4.5% of GDP by FY26, department of economic affairs secretary Ajay Seth said on Wednesday.

Speaking on the sidelines of a national workshop on learnings from the G20 infrastructure working group, Seth said the Indian economy showed good growth momentum during Q2 (July-September) and strong growth was expected during the quarter. India’s second-quarter GDP data is due on 30 November.

The Indian economy expanded 7.8% in the first quarter of the fiscal year on higher government and private capital expenditure and strong services growth. Real GDP at constant (2011-12) prices for the June quarter hit 40.37 trillion, marking a 7.8% expansion from 37.44 trillion a year ago, according to data from the Ministry of Statistics and Programme Implementation. Nominal GDP or GDP at current prices is estimated at 70.67 trillion, marking an 8% increase from 65.42 trillion in the year-ago quarter, the ministry said.

However, experts expect India’s GDP growth to moderate in Q2 FY24 from levels achieved during the previous quarter. According to a Barclay’s estimate, India’s GDP is set to expand by 6.8% year-on-year during Q2 FY24, slower than the 7.8% it achieved in Q1 FY24 but still showing robust sequential growth.

In August, Mint reported that the central government was unlikely to meet its divestment target of 51,000 crore for the current fiscal year. Despite the delay, the government expects higher non-tax revenues, including dividends from the Reserve Bank of India (RBI) and state-run banks, to offset any revenue shortfall from disinvestment and maintain the fiscal deficit target of 5.9% of GDP.

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Updated: 29 Nov 2023, 06:02 PM IST

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