"I certainly think that consolidation is as much dependent on good growth as on expenditure," Somanathan said. (Reporting by Nikunj Ohri; Additional reporting by Aftab Ahmed; Editing by Susan Fenton)
Messaging: twitter: @aftabahmed00)) By Nikunj Ohri
NEW DELHI, Feb 2 (Reuters) - India is 'fairly' confident
it can meet its target to cut its fiscal deficit by nearly 200
basis points to 4.5% of GDP in the next three years, assuming
there is no major global economic shock, a top government
official told Reuters on Thursday.
On Wednesday, the government in its 2023/24 budget set a
fiscal deficit target of 5.9% of gross domestic product for the
coming financial year, down from the current year's target of
6.4% of GDP. India's fiscal year starts on April 1.
As economic growth continues and the government aims to cut
spending on subsidies, the deficit should be able to fall to
4.5% of GDP by 2025/26, Finance Secretary T.V. Somanathan told
Reuters in an interview.
"We are fairly determined to achieve that consolidation ...
we will make a serious bid to reach the consolidation,"
Somanathan said.
India's Economic Survey forecast 2023/24 growth of 6% to
6.8%, which would make it one of the world's fastest-growing
major economies.
"If growth were to be sustained that would help us in future
fiscal consolidation," Somanathan said.
The fiscal deficit has come down from a record 9.3% of
GDP in 2020/21 due to expenses related to the pandemic, but at
6.4% of GDP by the end of the current fiscal year it would still
be much higher than its historical range of 4%-4.5%.
Since 2020/21, the Indian government has more than doubled
its spending on infrastructure projects including roads,
railways and ports to support growth amid weak private
investment.
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