Union Finance Minister Nirmala Sitharaman on Friday reaffirmed the government’s commitment to reducing the fiscal deficit from 5.6 percent of GDP in FY24 to 4.9 percent in FY25.
Speaking at the Kautilya Economic Conclave, Sitharaman said that the government is optimistic about maintaining fiscal discipline due to improved revenue collections.
The quality of government expenditure has improved, with a focus on capital outlays. The Finance Minister announced a 17.1 percent increase in capital expenditure for FY25, bringing it to USD 11.1 lakh crore, or 3.4 percent of GDP.
“A larger proportion of fiscal deficit is now accounted for by capital outlays, indicating an increasingly investment-oriented deficit financing,” she said.
Falling commodity prices have enabled a reduction in the budgeted allocation for subsidies on fertilizer and fuel, which has helped control revenue expenditure growth. This expenditure is expected to rise by 6.2 percent year-on-year.
The Finance Minister also highlighted the importance of infrastructure reforms, particularly the expansion of national highways.
“Infrastructure reforms over the past decade have expanded the national highways, increasing by 1.6 times from 2014 to 2024,” she added.
“The Bharatmala Pariyojana has significantly expanded the national highway network, increasing the length of high-speed corridors by 12 times and 4-lane roads by 2.6 times between 2014 and 2024. Today, 11.7 km of NH roads are laid on average per day, which is three times more than what was the case in FY14,” she added.
(ANI)