Gross fiscal deficit in relation to GDP India FY 2015-2024

In financial year 2024, the estimate for gross fiscal deficit in India was estimated to be 5.6 percent of the GDP. This was a decrease from the previous year's deficit in the country. The fiscal deficit of the government is the difference between the total expenditure incurred and the total non-debt capital receipts of the government. It indicates the total borrowing requirements of the government. 

The impact of geo-political situation

The Russia-Ukraine aggravated the supply disruptions impacting the prices of fuel, food and other essential commodities. The government's fiscal policy response was additional spending on food and fertilizer subsidies, accompanied by specific duty cuts to shelter the consumers from high imported prices.

Impact from the pandemic

Due to concerns over gradually slowing economic growth, the government increased its fiscal spending in early 2019. With the onset of the coronavirus (COVID-19) and consequent lockdown, the unprecedented financial stimulus package led to the worsening of the gross fiscal deficit. This further stressed the tax revenue system across the country. A major impact of the pandemic was the projection of negative quarterly growth of GDP in June 2020 across India. The fiscal deficit, as of May 2020, was estimated to be approximately two trillion Indian rupees.