CII wants government to stick to fiscal deficit target – Times of India-OxBig News Network

NEW DELHI: Industry body CII has suggested government to stick to the fiscal deficit target of 4.9% of GDP for 2024-25 and 4.5% for 2025-26, cautioning that “overly aggressive targets” beyond these could adversely affect India’s economic growth.
“India has been growing rapidly amidst a slowing global economy. Prudent fiscal management for macroeconomic stability has been pivotal to this growth,” Chandrajit Banerjee, director general at CII, said, elaborating on suggestions for the forthcoming Union Budget.
CII also highlighted the announcement in the Union Budget 2024-25 to keep the fiscal deficit at levels that help reduce the debt-to-GDP ratio.
In preparation for this, the forthcoming Budget could lay out a glide path to bring the central govt’s debt to below 50% of GDP in the medium term (by 2030-31), and below 40% of GDP in the long term, CII has suggested.
Such an explicit target will have a positive impact on India’s sovereign credit rating and further on the interest rates in the economy, the Confederation of Indian Industry stated.
“To aid longer-term fiscal planning, government should consider instituting fiscal stability reporting. This could include issuing annual reports on fiscal risks under different stress scenarios and the outlook for fiscal stability,” it said.