Fiscal deficit and inflation will decrease in the financial year 2025, government consumption is expected to increase
Indian Economy Consumption : In the country’s general budget, the finance minister has focussed more on budget provisions that make the middle class happy. From all the analyses and analyses after the budget, it is known that the finance minister is trying to please the general public. Along with this, the government is also focussing on some of the big factors of the economy, including fiscal deficit, inflation, taxation, economic growth rate and many other economic aspects.
Government consumption growth expected to improve
According to a report released on Sunday, government consumption growth is expected to improve in fiscal year 2025 given the increase in revenue expenditure by state and central governments, while private consumption growth is expected to be driven by rural demand, low inflation and a favourable base. PwC’s ‘Budget 2025-26: Promoting India’s Inclusive Growth’ report states that a strong growth in exports will also see a strong growth in exports of services. The report details the salient features of the budget, the economic outlook and the key tax and regulatory proposals that will shape India’s economic growth in the coming years.
According to earlier advance estimates, India’s economic growth is expected to be 6.4 per cent in FY2025, compared to 8.2 per cent in FY2024. The main reasons for this are reduced urban consumption, high food inflation rates, slow growth in capital building, and global adversities.
India is the fastest growing country in the world in 2025
However, the report states that with a strong domestic market, a growing working-age population and strong macroeconomic fundamentals, India will remain the fastest growing country in the world by 2025.
Government of India will move forward in achieving the target of fiscal deficit
The government estimates that it will improve its fiscal deficit target by 4.9 per cent and keep it at 4.8 per cent for fiscal year 2025. It has also put a fiscal deficit of 4.4 per cent in the budget for FY26, abandoning its commitment to achieve a deficit of less than 4.5 per cent by FY26. The Economic Survey has projected a growth in the range of 6.3 per cent to 6.8 per cent in FY26.
“Inflation is expected to come down to an average of 4.5 percent in FY2026, which will be helped by favourable food inflation and softening in commodity prices, with expectations of a good harvest and a general monsoon .
The report said that the exchange rate, which is under pressure, should improve as the Indian crude oil import basket fell due to low volatility in foreign portfolio investor (FPI) inflows and softening in crude oil prices.
