Economic Affairs Secretary Highlights Fiscal Consolidation and FDI Improvements

Ajay Seth, Secretary at the Department of Economic Affairs, emphasized the fiscal deficit reduction while accommodating essential expenditures. He also addressed initiatives to enhance FDI inflows, focusing on policy refinements and ease of doing business, as India targets a fiscal deficit of 4.9% for FY 2024-25.

Ajay Seth, Secretary at the Department of Economic Affairs under the Ministry of Finance, emphasized that fiscal consolidation is being achieved without compromising essential expenditures. “Fiscal consolidation is being done while meeting all essential and priority expenditures, providing for new initiatives like employment in skilling, and still leaving enough for the private sector,” Seth told ANI on Budget day.

The fiscal deficit target for 2024-25 is set at 4.9%, an improvement over the Interim Budget estimates. “We have utilized additional funds from RBI dividends to retire high-cost debt, making us confident of achieving the 4.9% target. Our goal is to reduce it further to below 4.5% by 2025-26,” Seth explained.

Addressing concerns about declining FDI, Seth noted that most FDIs are approved automatically and stressed the need to create favorable conditions for investment. He also highlighted eased procedures to make India an attractive destination for foreign investors, citing examples of expedited land acquisition for manufacturing plants. Media reports indicate a significant drop in net FDI, but Seth clarified that the gross FDI remained stable.