As governments face increasing pressure to balance their books, fresh fiscal strategies are emerging. In India, for instance, the focus has shifted towards reducing subsidies and incentivizing private investment. The latest Union Budget allocated 3.5% of GDP towards subsidies, a decrease from 4.2% in the previous year. This move is expected to save the government approximately 1.2 trillion rupees.
Meanwhile, the introduction of new tax reforms, such as the Goods and Services Tax, has simplified the taxation process and increased revenue collection. With a fiscal deficit target of 3.8% for the current year, the government is walking a tight rope between stimulating growth and maintaining fiscal discipline. As the economy continues to grow, it remains to be seen whether these strategies will yield the desired results.