Next steps in fiscal management: Road map needed for debt, deficit targets

The Central government debt is projected to decline from 58.1 per cent of GDP in 2023-24 to 56.8 per cent in 2024-25

The Union Budget for 2025-26 will be presented in a few weeks. While various stakeholders have their own expectations, this column will focus primarily on the management of government finances, extending beyond just the upcoming Budget. Reports suggest that the Union government would aim to contain the fiscal deficit at 4.4 per cent of gross domestic product (GDP) in 2025-26. This means it will achieve the medium-term target set after the pandemic, which will be a significant achievement and must be appreciated. However, the debate is what happens next. In the July Budget, Finance Minister Nirmala Sitharaman had announced that