The Finance Minister and the Senior Congress Leader P Chidambaram said on Saturday that the Narendra Modi-led government has done a great job in containing the debt and fiscal deficit even in the days of economic volatility. Chidambaram, who has presented nine union budgets under the UPA government, said there was a lot to be done in terms of developing the country.
After the bitter experience of 2009-11, the lesson I learned is that we should manage our debt well. We must manage our borrowing because it affects government spending, inflation, and affects our ability to spend. Chidambaram said at the India Today Conclave 2023 in Delhi that the Prime Minister Narendra Modi would get credit for its single-minded focus on containing the deficit and debt management.
The fiscal deficit reached 67.8 per cent of the full-year target last month, according to the data from Controller General of Accounts CGA last month.
The fiscal deficit, the gap between expenditure and revenue collection, was at Rs 11.9 lakh crore during the April-January period, according to the CGA. The government borrows money from the market to finance its fiscal deficit.
The fiscal deficit in the comparable period from 2021 -- 22 was 58.9 per cent of that year's Revised Estimate RE in the Budget.
The government expects the deficit to be at Rs 17.55 lakh crore or 6.4 per cent of the GDP for the full year 2022 -- 23.
The fiscal deficit for laymen is the difference between total revenue and total expenditure. It is an indication of the total borrowings needed by the government. The fiscal deficit is financed through internal market borrowings, with a small portion coming from securities against savings, provident funds, and external debt.
The fiscal deficit target for 2023 -- 24 was projected to be 5.9 per cent of GDP, according to the Union Budget presented by Finance Minister Nirmala Sitharaman on February 1.
The fiscal deficit will fall below 4.5 per cent of GDP by the year 2025 -- 26.
According to the 2023 Union Budget, India's external debt is only 1 per cent of the total deficit, which is estimated to be Rs 22,118 crore.