According to the report, wide fiscal deficits combined with lower real and nominal GDP growth over the medium term will constrain the government’s ability to reduce its debt burden. It also said the prospects for fiscal consolidation remain weak particularly given the government’s mixed track record of implementing revenue-raising measures. It said although the government has not provided an explicit medium-term fiscal consolidation road map, the budget targets a fiscal deficit of 4.5 per cent of GDP by fiscal 2025-26, which amounts to an average annual deficit reduction of about 0.5 per cent of GDP over four years.
It further said given India’s very high debt burden, this gradual pace of consolidation will prevent any material strengthening in the government’s fiscal position over the medium term, unless nominal GDP growth picks up sustainably to reach much higher rates than historically recorded.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
