FM Sitharaman sets FY25 fiscal deficit target at 5.1%, goes aggressive on consolidation

The government has targeted a fiscal deficit of 5.1 percent of the GDP for 2024-25, according to the interim Budget presented by Finance Minister Nirmala Sitharaman on February 1, significantly surprising market expectations. A Moneycontrol survey of economists expected the government to set a fiscal deficit target at 5.3 percent for the year starting April 1. At 5.1 percent, the fiscal deficit target for next year is a huge 70 basis points lower than the current year's revised estimate of 5.8 percent. One basis point is a hundredth of a percentage point.