India's finance minister expects fiscal deficit for 2024-2025 to narrow to 5.1%

India's finance minister, Nirmala Sitharaman, said on Thursday the country's fiscal deficit for financial year 2025 will narrow to 5.1% from the revised 5.8% for 2024.

Capital expenditure will rise by 11.1% to 11.11 trillion rupees ($133.9 billion) in fiscal year 2025, while tax revenue for the year would be 38.31 trillion rupees ($461.7 billion), she said while presenting the interim budget before the general elections.

Sitharaman said that long-term interest free loans would be given to various states to develop tourist centers, while highlighting that spiritual tourism saw a boost rose last year. A provision will be made of 750 billion rupees at a 50-year interest free loan for states to boost tourism.  

Noting that India's economy will see an "unprecedented" development, Sitharaman highlighted four major areas of focus for the government: poverty, youth, women and farmers.

The Finance Ministry said earlier this week that India could become the world's third-largest economy by 2027 with a GDP of $5 trillion.

"Food, fertilizer, fuel and finances are issues due to pandemic, but India has successfully navigated its way," Sitharaman said, while reiterating the government's goal of a developed India by 2047.

The interim budget is seen as a stop-gap financial plan during an election year, aimed at meeting immediate financial needs before a new government is formed. The full-fledged union budget will only be released after the elections.

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