The country is poised to bring its fiscal deficit below 4.5 per cent of GDP by 2025-26.

The finance ministry underscored this goal in its half-yearly fiscal review, highlighting robust tax collections and disciplined spending.

Growth remained at 6 per cent during the first half (H1) of 2024-25, driven by a strong services sector and improved industrial output.

Gross Value Added (GVA) growth was 6.2 per cent, underpinned by 7.1 per cent growth in services and 6 per cent in industry, while agriculture lagged at 2.7 per cent, data from the finance ministry’s Half Yearly Review of the Trends in Receipts and Expenditure showed.

The fiscal deficit for FY25 is pegged at 4.9 per cent of GDP, with H1 (April-September) data indicating that the government is on track to meet its goals.

The deficit stood at ₹4.75 trillion, or 29.4 per cent of the budget estimate (BE) of ₹16.13 trillion, marking its lowest mid-year level in five years.

“Global headwinds and associated risks are yet to abate, with the situation worsening due to escalating conflicts,” the finance ministry said, emphasising the need for fiscal flexibility.