NEW DELHI: Finance minister Nirmala Sitharaman on Monday said the government is taking steps to carefully monitor the fiscal deficit, which is estimated at 9.5 per cent of the gross domestic product (GDP) for the current financial year.
The ‘mool mantra’ now is that fiscal deficit is something that one cannot escape, but at the same time, it needs to be carefully tackled, she said in her post-budget address to members of PHD Chamber of Commerce.
India has exceeded its fiscal deficit target of 3.5 per cent in the current fiscal by a wide margin, due to higher spending to stimulate the economy amid the Covid-19 pandemic.
The fiscal deficit — the excess of government expenditure over its revenues — has been pegged at 9.5 per cent of GDP in the current fiscal ending March 31, as per the revised estimate.
For the next fiscal, the deficit has been pegged at 6.8 per cent of GDP, which will be further lowered to 4.5 per cent by fiscal 2025-26.
Emphasising that the government has made the Union Budget transparent, she said there was nothing under wraps or swept under the carpet.
“Whatever the government is borrowing or spending is open for everyone to see,” she said.
The government has spent big on those areas that provide a big multiplier effect, the minister added.
Observing that funding the long term infrastructure financing is the job of the Development Finance Institution (DFI) she said it is not the job of just one DFI, but it is an opportunity for private DFIs to come into play.
With many private DFIs competing, the entire process would become competitive, she added.