New Delhi: Finance Minister Nirmala Sitharaman, during her visit to San Francisco, reaffirmed India’s commitment to reducing its fiscal deficit to below 4.5% by 2026. Speaking to the Indian diaspora in the US, Sitharaman outlined the government’s ongoing efforts to manage the fiscal deficit, which had increased during the COVID-19 pandemic.
“We set clear targets in 2021 to manage our fiscal deficit, and since then, we have consistently followed year-on-year goals. Our aim is to bring it down below 4.5% by 2026, and we are on track to achieve this,” said Sitharaman.
She also highlighted the recognition India is receiving from international bodies like the International Monetary Fund (IMF) and the World Bank. “When we talk about India being the fastest-growing economy, both the IMF and the World Bank acknowledge the immense potential of India to drive global trade,” she added.
A lower fiscal deficit boosts investor confidence by reflecting prudent financial governance and increases the chances of a sovereign credit rating upgrade. India’s budget deficit has steadily decreased from over 9% in 2020-21 to an estimated 4.8% for 2024-25, down from 5.6% in 2023-24 and 6.4% in 2022-23.
Sitharaman is currently on a five-day visit to the United States, where she will deliver a keynote address at Stanford University and engage in discussions with CEOs in San Francisco, focusing on investment and technological advancements. She will also attend diaspora events to enhance India’s cultural presence abroad.
In Washington DC, Sitharaman will participate in the IMF and World Bank Spring Meetings, as well as the G20 Finance Ministers and Central Bank Governors Meetings. Additionally, she will hold bilateral talks with global counterparts, further underscoring India’s commitment to international cooperation and development.
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