The Indian government’s efforts to curb fiscal deficit have been a key focus area in recent state budgets. With a target to reduce the fiscal deficit to 3.5% of GDP by 2023, various states have introduced measures to increase revenue and reduce expenditure. For instance, the Maharashtra state budget allocated Rs 1,300 crore for the development of infrastructure projects, while the Tamil Nadu budget focused on enhancing education and healthcare facilities. However, critics argue that these measures may not be sufficient to achieve the desired fiscal consolidation.
According to data from the Reserve Bank of India, the combined fiscal deficit of states stands at 3.1% of GDP, higher than the national average. A closer analysis of the budgets reveals that while some states have made significant progress in reducing their debt, others continue to grapple with high borrowing costs. As the country navigates its way towards fiscal recovery, it is essential to implement prudent fiscal policies that balance growth with stability. With the Union Budget around the corner, all eyes are on the government to introduce measures that will boost economic growth and reduce the fiscal deficit.
The allocated budget for fiscal year 2023-24 is Rs 45 lakh crore, a 10% increase from the previous year. The budget also aims to increase tax revenue by 15% and reduce subsidy expenditure by 5%