Qualitative improvement

Higher capex will improve growth prospects

Union Finance Minister Nirmala Sitharaman pleasantly surprised Budget analysts by projecting a lower than expected fiscal deficit in the Interim Budget last week. This is particularly commendable because of the expected low nominal gross domestic product (GDP) growth this financial year. The government expects to contain the fiscal deficit at 5.8 per cent of GDP in 2023-24, as against the Budget Estimate (BE) of 5.9 per cent. Further, sticking to the medium-term fiscal glide path — announced in the Budget speech for 2021-22 — of lowering the fiscal deficit to below 4.5 per cent of GDP, Ms Sitharaman projected a