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Budget 2021: Govt likely to target fiscal deficit at 4% of GDP by FY26

Centre to deviate from long-standing medium-term target of 2.5-3% of GDP

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The government had changed the recommendations of the N K Singh Committee on fiscal consolidation and targeted bringing down the fiscal deficit to 3.1 per cent of GDP by 2022-23 (FY23) | Illustration: Ajay Mohanty

Shrimi Choudhary Indivjal Dhasmana New Delhi

4 min read Last Updated : Jan 18 2021 | 6:10 AM IST

The Centre is likely to lay down a road map in the upcoming Budget to reduce its fiscal deficit to 4 per cent of gross domestic product (GDP) by 2025-26.

This is necessary because there will be demands for expansionary policies, even in the next couple of years.

This implies the government is set to deviate from the long-standing medium-term target of 2.5-3 per cent of GDP as prescribed by amendments to the Fiscal Responsibility and Budget Management Act (FRBM).

The government had changed the recommendations of the N K Singh Committee on fiscal consolidation and targeted bringing down the

Topics : Fiscal Deficit Nirmala Sitharaman Budget 2021 GDP Indian Economy Finance Ministry

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