The government remains focused on enhancing the quality of public spending, strengthening the social security system, and reducing the fiscal deficit to 4.5% of GDP by FY26, according to a finance ministry report.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for 2025-26 on February 1. The government is committed to following a fiscal consolidation path, which was first outlined in the FY 2021-22 Budget, aiming to achieve a fiscal deficit lower than 4.5% of GDP by FY26.

The finance ministry's half-yearly review, presented in the Lok Sabha, highlights that the government's strategy will focus on improving public spending quality while reinforcing social security for the needy. This approach is expected to strengthen India's macroeconomic fundamentals and ensure financial stability.

The 2024-25 Budget was introduced against a backdrop of global uncertainty, with conflicts in Europe and the Middle East impacting the global economy. However, India's strong economic foundations have helped it navigate these challenges, positioning the country as one of the fastest-growing economies in the world.

For FY25, the total estimated expenditure is ₹48.21 lakh crore, with ₹21.11 lakh crore spent in the first half, accounting for 43.8% of the total budget. The fiscal deficit for FY25 is projected at ₹16.13 lakh crore, or 4.9% of GDP, with plans to finance it through market borrowings and other sources.

The government’s ongoing efforts toward fiscal consolidation aim to create a more stable and growth-oriented economic environment while maintaining financial discipline.