• UGI USER
  • Jun 01, 2024
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“INDIA’S FISCAL DEFICIT FOR FY24 LOWER THAN REVISED ESTIMATE”

Why in the news?

  • India’s fiscal deficit for FY24 stood at 5.6% of GDP, lower than the revised estimate of 5.8%, due to better revenues and expenditure management.
  • The government targets a fiscal deficit of 5.1% for FY25, aiming for further reduction below 4.5% by 2025-26, leveraging a potential dividend from the Reserve Bank of India.
source:sketchbubble

About Fiscal deficit:

  • Measures the gap between a government’s total expenditure and total receipts, excluding borrowing.
  • Importance: Indicates financial health and spending habits of the government.
  • Calculation Formula: Fiscal Deficit = (Revenue Expenditure + Capital Expenditure) – (Revenue Receipts + Capital Receipts).
About RBI:

  • Central Bank: India’s central bank and regulatory body
  • Establishment: Founded in 1934 under the Reserve Bank of India Act
  • Origins: Based on recommendations of the 1926 Royal Commission on Indian Currency and Finance (Hilton Young Commission).
  • Fully owned by the Ministry of Finance, Government of India, since nationalization (1949).

Role:

  • Monetary Authority:Formulates, implements, and monitors monetary policy.
  • Regulator and Supervisor of the Financial System:Prescribes parameters for banking operations.
  • Manager of Foreign Exchange: Manages Foreign Exchange Management Act, 1999.

Associated Article:

https://universalinstitutions.com/disinvestment-strategy-shift/