New Delhi, Jan 31,2024: India’s fiscal deficit for the 9-month period of April-December 2023 is at Rs 9.82 lakh crore, which works out to 55 per cent of the target for the full financial year ending on March 31, 2024, according to data released by the country’s Controller General of Accounts on Wednesday.
With the fiscal deficit well under control, Finance Minister Nirmala Sitharaman will have more headroom for carrying out the government’s investment plans to push up the economic growth rate and make adequate allocations for social welfare schemes to benefit the poor.
For the entire financial year 2023-24, the fiscal deficit of the government has been fixed at a target of Rs 17.86 lakh crore or 5.9 per cent of the gross domestic product (GDP).
The data also shows that the country’s April-December 2023 capex or investment in infrastructure projects is at Rs 6.74 lakh crore, 67.3 per cent of FY24 target which is well on course.
The figures released on Wednesday show that the macro-economic fundamentals of the economy are strong as the fiscal deficit is well under control and the government will not have to take recourse to excessive borrowing for meeting its capital expenditure.
The fiscal deficit reflects the shortfall of the government’s revenue compared to its expenditure.
A fiscal deficit means the government has to recourse to excessive borrowing which slows down the economic growth rate as less money is left for corporates and consumers to borrow for their respective investment and consumption needs.
A high fiscal deficit also pushes up the inflation rate and is destabilising for the economy.