The next Budget is expected to prioritize sustaining India’s medium-term growth through infrastructure expansion and fiscal consolidation. India’s economy has demonstrated “resilience.” with Gross Domestic Product (GDP) growing by 8.2 percent in 2023-24 following 9.7 percent and 7.7 percent in the preceding two years, it said, adding that the fiscal deficit has shrunk from 9.1 percent in 2020-21 to 5.6% in 2023-24. The additional fiscal space might be used to reduce the fiscal deficit to 5% of GDP while boosting capital investment to 3.4% of GDP, allowing for
17.5% growth in FY25 over the previous fiscal year.
Since the Covid-affected year of FY21, it has been greater than 2%, with a steady increase from 2.1% in FY21 to 3.2% in FY24. In terms of growth, revenue expenditure growth slowed sharply after FY22. The majority of this could be attributed to a slowdown in subsidy development. Similarly, between FY21 and FY24, capital spending increased from 24.4% to 39.4% in four consecutive years.