Prudent Fiscal Targets: CII's Blueprint for India's Growth

The Confederation of Indian Industry (CII) advises the Indian government to adhere to fiscal deficit targets for upcoming years to maintain economic stability and growth. CII suggests structured fiscal planning with debt reduction pathways and fiscal stability reporting while urging states to practice fiscal prudence.

The Confederation of Indian Industry (CII) has advised the Indian government to maintain its fiscal deficit targets of 4.9% for 2024-25 and 4.5% for 2025-26 in the upcoming Union Budget, emphasizing the importance of prudent fiscal management for India's continued rapid growth amidst a sluggish global economy.

CII has indicated that maintaining the deficit at recommended levels will aid in reducing the debt-to-GDP ratio, positively influencing India's sovereign credit rating and interest rates. The industry body also recommends long-term debt reduction strategies, aiming to lower the central government's debt below 50% of GDP by 2030-31.

Furthermore, CII proposes introducing Fiscal Stability Reporting to offer insights into fiscal risks and stability over varied stress scenarios while encouraging states to adopt fiscal prudence through measures like state-level reporting and independent credit rating systems. This would bolster both state and national fiscal sustainability efforts.

(With inputs from agencies.)