India’s fiscal deficit has been a pressing concern for policymakers. To address this, the government has implemented various strategies, including reducing subsidies and increasing tax revenues. For instance, the goods and services tax (GST) has helped increase tax collections.
However, more needs to be done to reduce the deficit, which stands at 6.4% of GDP. The government plans to reduce it to 4.5% by 2025. This can be achieved by rationalizing subsidies and improving tax compliance.
The GST council has also proposed reforms to simplify the tax structure and reduce evasion. These efforts are expected to yield positive results, but a lot depends on effective implementation. With a focus on fiscal prudence, India can achieve its goal of reducing the fiscal deficit.