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However, the deficit is expected to remain much larger than the 4-4.5 per cent of the GDP that was usual for decades. The officials aware of the matter told Reuters that the Centre is hoping to return to those historical levels by FY26.
According to a report by PTI, economists at SBI expect the Budget to peg the fiscal deficit close to 6 per cent.
"The Budget FY24 presents a challenge before the government to stick to the road map for fiscal consolidation, amidst a global environment of declining inflation," the economists said.
They added that India will have to grow at a faster clip for making this possible, given its estimates on expenditure and revenue mobilisation. They expect 8.2 per cent growth in expenditure but the subsidy bill to come down, and revenues to grow 12.1 per cent.
On the borrowing front, analysts expect the market borrowings of the government to be pegged higher in FY24.
Japanese brokerage Nomura, which pegged the fiscal deficit at 5.9 per cent, said the gross borrowing will rise to Rs 15.5 trillion from Rs 14.2 trillion in FY23, while SBI estimated it at Rs 16.1 trillion.
The note by HSBC said the year before elections are typically associated with low privatisation receipts and expenditure pressures, and included it among the challenges the government will have to grapple with.
(With agency inputs)
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First Published: Wed, January 25 2023. 11:41 IST