Syllabus: GS-III
Subject: Economy
Topic: Fiscal policy and Budgeting
Issue: Fiscal consolidation
- Interim budget emphasised on increasing capital expenditure and fiscal consolidation.
- Capital expenditure is increased to 11.1% in the interim budget over 2023-24 . It is expected to go up to 17% in regular budget.
- Capital expenditure as % of GDP saw only a marginal increase – 3.2% in 2023-24 to 3.4 in 2024-25
- Fiscal deficit is expected to go down to 5.1%. centre’s fiscal deficit target is 3% by 2028-29
- House hold savings in financial assets is decreasing.
Estimations for 2024-25
- buoyancy of tax revenue – 1.33
- Real GDP growth rate of 7%
Committee on FRBM act, 2003
Debt to GDP ratio of centre and states put to together shall not be more than 60% and centre shall not cross 40%.
