India’s fiscal deficit for the fiscal year 2023-24 has shown significant improvement, standing at 5.63% of the GDP, surpassing the government’s initial target of 5.8%. This positive deviation reflects effective economic management amidst global volatility.
Factors Contributing to Narrowing Fiscal Deficit
- Increased Revenue Collection
- The government’s efforts to boost revenue streams through reforms and initiatives have yielded fruitful results.
- Prudent Expenditure Management
- Effective management of expenditures has played a crucial role in reducing the fiscal deficit.
- Unexpected Economic Growth Drivers
- Potentially unexpected economic growth drivers have contributed to narrowing the deficit.
Implications and Significance
- India’s fiscal discipline amid challenges like the COVID-19 pandemic demonstrates resilience and adaptability.
- This achievement could enhance investor confidence and position India as an attractive investment destination, fostering economic growth.
Future Outlook
- Sustained efforts in structural reforms, efficient resource allocation, and fostering a conducive business environment are essential for maintaining this positive trajectory.
Multiple Choice Questions (MCQs) with Answers:
- What was India’s fiscal deficit for the fiscal year 2023-24?
- A) 5.8% of the GDP
- B) 5.63% of the GDP
- C) 6.0% of the GDP
- D) 5.5% of the GDP
- Answer: B) 5.63% of the GDP
- What factor(s) contributed to the narrowing of India’s fiscal deficit in FY 2023-24?
- A) Increased revenue collection
- B) Prudent expenditure management
- C) Unexpected economic growth drivers
- D) All of the above
- Answer: D) All of the above
- What could be the implications of India’s improved fiscal deficit in FY 2023-24?
- A) Decreased investor confidence
- B) Weakened economic growth prospects
- C) Enhanced investor confidence and economic growth
- D) None of the above
- Answer: C) Enhanced investor confidence and economic growth
- What is crucial for maintaining India’s positive fiscal trajectory in the future?
- A) Decreased focus on structural reforms
- B) Inefficient resource allocation
- C) Continued focus on structural reforms and efficient resource allocation
- D) Economic isolationism
- Answer: C) Continued focus on structural reforms and efficient resource allocation