The Interim Budget for 2019-20 puts total expenditure at Rs 27,84,200 crore, marking an increase of 13.3 per cent as compared to Rs 24,57,235 crore in 2018-19.
The fiscal deficit for 2019-20 is estimated to be 3.4 per cent of the gross domestic product (GDP), Finance Minister Piyush Goyal said while presenting the budget proposals in the Lok Sabha on Friday.
The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government.
After completion of the fiscal deficit consolidation programme, the Central government will now focus on debt consolidation. "We have maintained the glide path towards our target of 3 per cent of fiscal deficit to be achieved by 2020-21," said Finance Minister Goyal.
India's debt to GDP ratio was 46.5 per cent in 2017-18. The Fiscal Responsibility and Budget Management (FRBM) Act prescribes the debt to GDP ratio should be brought down to 40 per cent by 2024-25.
"Along with completion of the fiscal deficit consolidation programme, we will now focus on debt consolidation," said Finance Minister Goyal.
The fiscal deficit has been brought down to 3.4 per cent in 2018-19 from the high of almost 6 per cent seven years ago, the Finance Minister said. The current account deficit (CAD) is likely to be only 2.5 per cent of GDP this year against a high of 5.6 per cent six years ago.
The current account deficit is a measurement of a country's trade where the value of the goods and services it imports exceeds the value of the goods and services it exports. The current account includes net income such as interest and dividends, and transfers such as foreign aid, although these components make up only a small percentage of the total current account.
"We contained the fiscal deficit notwithstanding the Finance Commission's recommendations increasing the share of states from 32 per cent to 42 per cent in central taxes, which we accepted in the true spirit of cooperative federalism, thereby transferring significantly higher amounts to the states," said Goyal.
Finance Minister Goyal said that there has been a growth of 18 per cent in direct tax collections in 2017-18 and increase in tax base by as many as 1.06 crore people filing income tax returns for the first time in FY 2017-18, mainly on account of demonetisation.
Key POINTS
* Total expenditure at Rs 27,84,200 crore, marking an increase of 13.3 per cent as compared to Rs 24,57,235 crore in 2018-19.
* The fiscal deficit for 2019-20 is estimated to be 3.4 per cent of the gross domestic product (GDP).
* India's debt to GDP ratio was 46.5 per cent in 2017-18.
* The fiscal deficit has been brought down to 3.4 per cent in 2018-19 from the high of almost 6 per cent seven years ago.
* The current account deficit (CAD) is likely to be only 2.5 per cent of GDP this year against a high of 5.6 per cent six years ago.
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