Union Budget 2024: In her presentation of the Union Budget for the fiscal year 2024-25, Union Finance Minister Nirmala Sitharaman announced a fiscal deficit target of 4.9 per cent of the gross domestic product (GDP). This marks a significant reduction from the target set in the Interim Budget presented on February 1, which pegged the fiscal deficit at 5.1 per cent of GDP. For the previous fiscal year 2023-24, the government had initially set a fiscal deficit target of 5.9 per cent of GDP. However, this figure was later revised downward to 5.8 per cent, reflecting the government's efforts to maintain fiscal discipline and manage public finances more efficiently.
"The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year," Sitharaman said. "The government is committed to stay the course. From 2026-27 onwards our endeavour will be to keep fiscal deficit each year such that the central government's debt will be on a declining path as a percentage of GDP," she added.
What is fiscal deficit?
It should be noted here that the fiscal deficit represents the difference between the total revenue and total expenditure of a government. Essentially, it is an indicator of the total borrowings that the government may need to meet its expenditure commitments. A higher fiscal deficit suggests greater borrowing requirements, which can impact the economy in various ways, including influencing interest rates and investment levels.
Reduction in customs duty on gold, silver, mobile phones
Meanwhile, Finance Minister Nirmala Sitharaman also proposed a reduction in basic customs duty on gold and silver to 6 per cent and platinum to 6.4 per cent. In her budget speech in Lok Sabha, she also proposed a reduction of basic customs duty on mobile phones, and mobile chargers to 15 per cent.
She also made a provision for exemption of customs duty on 25 critical minerals. The minister announced the removal of basic customs duty on ferronickel, and blister copper while increasing the same to 15 per cent from 10 per cent on specified telecom equipment. The reduction in basic customs duty of gold, silver and platinum has been a long pending demand of the gems and jewellery industry.
