Recent discussions around fiscal deficit, borrowing, and debt have sparked a renewed interest in nationally focused fiscal reforms. With the aim of reducing the fiscal deficit to 4.5% of GDP by 2025, policymakers are exploring various options. One such option is to increase the GST rate on certain luxury items, which could generate an additional 0.5% of GDP in revenue.
However, this move is expected to face resistance from various quarters. Meanwhile, the government has announced plans to borrow an additional $10 billion from foreign markets to finance its budget deficit. This move is seen as a positive step towards meeting the fiscal deficit target.
Overall, while progress is slow, there is a growing recognition of the need for fiscal reforms in the country.