Nirmala Sitharaman Discusses Fiscal Deficit Reduction and Infrastructure Growth at Kautilya Economic Conclave

Nirmala Sitharaman Discusses Fiscal Deficit Reduction and Infrastructure Growth at Kautilya Economic Conclave

Nirmala Sitharaman Discusses Fiscal Deficit Reduction and Infrastructure Growth

Commitment to Fiscal Discipline

Union Finance Minister Nirmala Sitharaman spoke at the Kautilya Economic Conclave about the government’s plan to reduce the fiscal deficit from 5.6% of GDP in FY24 to 4.9% in FY25. She highlighted that improved revenue collections are key to maintaining fiscal discipline.

Focus on Capital Expenditure

The Finance Minister announced a 17.1% increase in capital expenditure for FY25, amounting to USD 11.1 lakh crore, or 3.4% of GDP. This shift indicates a focus on investment-oriented deficit financing.

Impact of Falling Commodity Prices

Lower commodity prices have allowed the government to reduce subsidies on fertilizers and fuel, helping to control revenue expenditure growth, which is expected to rise by 6.2% year-on-year.

Infrastructure Reforms

Sitharaman emphasized infrastructure reforms, noting that national highways have expanded by 1.6 times from 2014 to 2024. The Bharatmala Pariyojana has significantly increased the length of high-speed corridors and 4-lane roads.

Long-term Growth through Reforms

The government has implemented reforms in infrastructure, banking, trade policy, and investment, ensuring policy continuity for sustained growth.

Doubts Revealed


Nirmala Sitharaman -: Nirmala Sitharaman is the Finance Minister of India. She is responsible for managing the country’s finances, including the budget and economic policies.

Fiscal Deficit -: Fiscal deficit is when the government’s spending is more than its income. It means the government needs to borrow money to cover the gap.

GDP -: GDP stands for Gross Domestic Product. It is the total value of all goods and services produced in a country in a year. It helps to measure how well a country’s economy is doing.

FY24 and FY25 -: FY24 and FY25 refer to the financial years 2024 and 2025. In India, a financial year starts on April 1st and ends on March 31st of the next year.

Capital Expenditure -: Capital expenditure is the money spent by the government on building things like roads, bridges, and schools. It helps in creating long-term assets for the country.

Commodity Prices -: Commodity prices refer to the cost of raw materials like oil, metals, and food. When these prices fall, it can reduce the cost of goods and services.

Subsidies -: Subsidies are financial help given by the government to make things cheaper for people, like food or fuel. Reducing subsidies can help the government save money.

Bharatmala Pariyojana -: Bharatmala Pariyojana is a government project in India aimed at building and improving roads and highways. It helps in making travel faster and easier across the country.

Kautilya Economic Conclave -: The Kautilya Economic Conclave is a meeting where experts discuss economic issues and policies. It is named after Kautilya, an ancient Indian economist and philosopher.

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