Revised GDP Series Alters India’s Fiscal Deficit Calculations

The Indian government revised its fiscal deficit projections due to a new GDP base year of 2022-23. The fiscal deficit percentages for FY 2022-23 to FY 2024-25 are now set at 6.7%, 5.7%, and 4.9%, respectively. This update reflects changes in the GDP estimation methodology.

The fiscal deficit percentages for the upcoming financial years were revised by the Indian government following changes in GDP calculations. The updates were disclosed in the Parliament on Tuesday.

According to the new GDP series, published on February 27, the fiscal deficit is projected to be 4.9% in 2024-25, 5.7% in 2023-24, and 6.7% in 2022-23, Pankaj Chaudhary, Minister of State for Finance, stated in a written reply to the Rajya Sabha.

This revision in fiscal deficit figures stems from a new GDP series with a base year of 2022-23, replacing the previous base year of 2011-12. The updated GDP figures estimate nominal GDP at Rs 318.07 lakh crore for 2024-25 and Rs 289.84 lakh crore for 2023-24. The fiscal deficit represents the gap between the government's total expenditures and its total receipts, excluding borrowings.

(With inputs from agencies.)