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Informist, Tuesday, Nov. 4, 2025

 

--Sitharaman: India's econ strength allows it to stand up for its interests 

--CONTEXT:Finance Minister Sitharaman's remarks at Delhi School of Economics 

--Sitharaman: Will be able to meet fiscal deficit target for FY26 

--Sitharaman: Need fiscal management reforms to meet developed econ goal 

 

NEW DELHI – The government will meet its fiscal deficit target of 4.4% for the current financial year, Finance Minister Nirmala Sitharaman said Tuesday. This would be in line with the fiscal consolidation roadmap laid out after the COVID-19 pandemic. Moving ahead, India will need reforms and prudential fiscal management for the goal of becoming a developed economy by 2047, Sitharaman said at an event at the Delhi School of Economics.

 

Some economists and market players have raised the concern that the government may miss its fiscal deficit target for the financial year 2025-26 (Apr-Mar) because of lower revenue collection following the relief in income tax and rationalisation of goods and services tax rates.

 

Under the fiscal roadmap, the fiscal deficit was to be brought below 4.5% of the GDP by FY26 from a record high of 9.2% in FY21. The fiscal deficit was 4.8% of the GDP in FY25. From FY27 onwards, the government will endeavour to keep the fiscal deficit each year such that the Centre's debt will be on a declining path as a percentage of the GDP. The government will aim to lower its debt to 49-51% of the GDP by March 2031. The central government's debt is seen at 57.1% of the GDP in FY25 and 56.1% in FY26.

 

During her valedictory lecture at the Delhi School of Economics, Sitharaman said India's economic strength allows the country to stand tall globally and protect its interests. Unless a country's economy is strong, it will never be able to stand up to speak for its interests, she said.

 

The finance minister's comments come at a time when India is negotiating trade deals with various countries, including the US and the European Union. India's trade negotiations with the US hit a rough patch earlier in the year following disagreements on the farm sector. US President Donald Trump called India a "dead economy" and slapped New Delhi with a 50% tariff. India and the US continue to negotiate a bilateral trade agreement, with Trump recently saying the US is "going to do a great trade deal with India".

 

"We are at a time when India is moving fast on so many different parameters, largely they are all economic," she said. "Of course, India and its population, India and its location in a global map have strategic significance, but India stands together today and stands tall and stands distinctly on its feet is because of the economic strength of India."

 

Sitharaman said India is closer to being the third-largest economy in the world than the fifth. As per the latest data from the International Monetary Fund, India remains the world's fifth-largest economy and will only overtake Japan for the fourth spot in 2026.  End

 

Reported by Shubham Rana

Edited by Rajeev Pai

 

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