Higher dividend from banks and financial institutions and improvement in tax mobilisation to help achieve fiscal deficit glide path; fiscal deficit expected to fall below 4.5%.
The government expects to receive Rs 1.02 lakh crore as dividend from the Reserve Bank of India (RBI) and public sector financial institutions in the next financial year.
This is 2.3% lower than the revised estimate of Rs 1.04 lakh crore for 2023-24.
The revised estimate for the current financial year is a whopping 118% higher than the budget estimate of Rs 48,000 crore as the RBI paid an unexpectedly large dividend of Rs 87,416 crore in May 2023.
The higher dividend from banks and financial institutions and improvement in tax mobilisation would help achieve a fiscal deficit glide path.
As per the fiscal consolidation roadmap, the government aims to bring the fiscal deficit down to below 4.5% by 2025-26 from 5.1% of GDP in 2024-25.
The government had estimated the fiscal deficit to come down to 5.4% in the next financial year beginning 1 April 2024.
