SBI Research has urged the Government to strike a right balance between fiscal consolidation and promoting growth and recommended that fiscal deficit should be brought down at the most by 20 basis points to the 5.1 per cent target specified in the interim Budget.\u00a0<\/p>\n
\u201cThe government needs to focus on fiscal prudence and continue the fiscal consolidation path. However, it may refrain from obsessing too much over the fiscal stance as it may come in the way of long term sustainable growth path..\u201d, SBI Research said in a note.\u00a0\u00a0<\/p>\n
In the Interim Budget presented earlier this year, fiscal deficit target was pegged at 5.1 per cent of GDP for 2024-25.<\/p>\n
SBI Research also sees capital expenditure, which was the main plank of Centre\u2019s growth strategy, getting bumped up to \u20b9 11.8 lakh crore from \u20b9 11.11 lakh crore projected in interim budget.\u00a0<\/p>\n
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<\/div>\nIt also expects nominal GDP growth to be pegged at 11 percent and the tax buoyancy is expected to be 1.2-1.3 with gross tax revenues growing over 13 percent.\u00a0<\/p>\n
\u201cAs the budgeted fiscal deficit gets lowered, gross market borrowing of the government will also reduce to around Rs 13.5 lakh crore in FY25 compared to Rs 14.1 lakh crore in the interim budget and net market borrowing to Rs 11.1 lakh crore against Rs 11.8 lakh crore earlier,\u201d SBI Research report, authored and led by Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI, said.<\/p>\n
This along with India\u2019s inclusion in Global Bond indices will keep the yield curve movements anchored, the research report added.<\/p>\n
For the year 2023-24, the government had initially set a fiscal deficit target of 5.9 per cent of GDP. This was later revised downward to 5.8 per cent.\u00a0<\/p>\n