Budget 2025: From fiscal deficit to spending priorities, what to expect from Finance Minister Nirmala Sitharaman
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Budget 2025: From fiscal deficit to spending priorities, what to expect from Finance Minister Nirmala Sitharaman

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Budget 2025: Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for FY26 on February 1, 2025. FY25 Fiscal Deficit Target Goldman Sachs expects the government to meet the fiscal deficit target of 4.9% of GDP in FY25, led by receipts upwards of 0.2% of GDP and lower-than-budgeted capex, despite lower nominal GDP growth. Fiscal Consolidation in FY26 The government is estimated to try to consolidate the fiscal deficit towards 4.4% - 4.6% of GDP in FY26, according to Goldman Sachs. Spending Priorities in FY26 The global investment bank expects government’s capex growth to slow to ~13% YoY from over 30% in FY21-24, while there might be a tilt towards welfare expenditure or transfer payments. Going forward, Goldman Sachs expects capex to remain at 3.2% of GDP in FY26, given the fiscal consolidation path of the central government.

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