On path to achieving fiscal deficit target of 4.5% by FY26: FM Sitharaman

Interim Budget: Revenue Secretary Sanjay Malhotra said that the removal of tax old tax disputes is likely to cost the Centre around Rs 3,500 crore

India is on the path to achieving its fiscal deficit target of 4.5 per cent or less by 2025-26, Finance Minister Nirmala Sitharaman said in her post-budget press conference on Thursday. Earlier, in the Interim Budget, FM pegged the fiscal deficit for FY24 at 5.8 per cent and 5.1 per cent for FY25.

"Every month, you get the reports coming out, so the budget process has become absolutely transparent, we set in the process of keeping everything brought on budget and nothing kept aside or underneath it," she said.

"So, we have a fiscal deficit of 5.8 per cent for 2023-24, which is much lower than 5.9 per cent in Budget Estimates. Similarly, we have given 5.1 per cent as a fiscal deficit for 2024-25. This clearly indicates that we are on track to meet the glide path set in 2021-22 and that we are well on track to meet the 4.5 per cent or below fiscal deficit even by FY26."

At the press conference, Finance Secretary TV Somanathan said that India's net to Gross Domestic Product (GDP) ratio lowest among the G20 countries. He added that 40 per cent, a figure that NK Singh Committee had envisaged, was before the Covid-19 pandemic and the current conditions should be considered for the analysis now.

Revenue Secretary Sanjay Malhotra said that the removal of tax old tax disputes is likely to cost the Centre around Rs 3,500 crore. In the Interim Budget, FM Sitharaman proposed to withdraw pending, non-verified, non-reconciled or disputed direct tax demands of certain amounts dating back to decades, a decision that is expected to help 10 million taxpayers.

She proposed to withdraw outstanding direct tax demands of up to Rs 25,000 for the period up to FY10 and up to Rs 10,000 for FY11 to FY15.

FM Sitharaman, in the press conference, also said that for the free electricity supply of up to 300 units via rooftop solarisation, the Centre has set aside Rs 10,000 crore. In the speech earlier in the day, she said that 10 million households would be enabled to obtain up to 300 units of free electricity every month through this.

She said it would allow savings of up to Rs 15,000 to Rs 18,000 annually for households from free solar electricity and selling the surplus to the distribution companies.