India’s fiscal deficit has been a pressing concern for policymakers. The government aims to reduce it to 4.5% of GDP by 2025. To achieve this, the focus should be on increasing revenue collection and reducing unnecessary expenditures. Implementing robust tax reforms and improving governance can help narrow the fiscal deficit.
For instance, the Goods and Services Tax (GST) has shown promise in increasing revenue. However, its implementation needs to be more efficient. By streamlining tax collection and plugging loopholes, the government can increase revenue without increasing tax rates. This approach will not only help reduce the fiscal deficit but also promote economic growth.