In a positive development for India’s economic outlook, the government anticipates achieving its fiscal deficit target of 5.9% of the Gross Domestic Product (GDP) for the financial year 2023-24, as stated by Junior Finance Minister Bhagwat Karad on Monday.
As of the first seven months of the financial year ending on March 31, 2024, India’s fiscal deficit stands at 8.04 trillion Indian rupees ($96.86 billion), constituting 45% of the estimated total for the entire year, according to government data released last month.
Despite this optimistic projection, challenges arise from the government’s divestment plans. Minister Karad informed lawmakers that only 100.5 billion rupees have been collected from selling stakes in government-run firms as of December 13, falling significantly short of the full-year target of 510 billion rupees.
Karad acknowledged the uncertainty in predicting the actual proceeds from divestment for the current financial year. Factors such as market conditions and investor appetite play a crucial role in determining the success of stake sales, making it challenging to estimate the exact quantum.
Reuters reported last month that the Indian government might miss its stake sale target for the fifth consecutive year, struggling to achieve even half of the initially targeted proceeds from planned sales of state-run firms.
