CII Urges Government to Stick to Fiscal Deficit Target Amidst Global Uncertainty


In the face of global economic uncertainty, the Confederation of Indian Industry (CII) emphasizes the importance of the government maintaining its fiscal deficit target of 5.9% in the current financial year. The CII suggests further narrowing this to around 5.4% in FY25, advocating a delicate balance between economic growth and fiscal consolidation.

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CII Reveals Game-Changing Strategy: Aims for 5.4% in FY25

Maintaining the Balance

CII stresses the critical need to balance economic growth and fiscal consolidation amid global uncertainties. A senior executive from CII highlights the significance of this equilibrium.

Long-Term Fiscal Goals

The government aims to limit its fiscal deficit to 4.5% of GDP by FY26, with experts expecting a specified glide path to further reduce the gap between receipts and spending met through borrowing to 3% of GDP.

National Mission on Advanced Manufacturing

CII proposes a national mission on advanced manufacturing to enhance quality and productivity, emphasizing technologically advanced production methods. The industry body also calls for expanding production-linked incentives to labor-intensive sectors like apparel, toys, and footwear.

GST Reforms

CII suggests streamlining the Goods and Services Tax (GST) structure by reducing the number of slabs to three. This includes bringing petroleum products, electricity, and real estate under the GST regime. The industry body advocates for a three-year schedule for disinvestment, considering demand-side considerations.

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Subsidy Rationalization

CII recommends rationalizing food and fertilizer subsidies without affecting deserving beneficiaries. It calls for the use of more current data in the food subsidy program, last updated in 2011-12, and proposes a shift to a cash transfer system for fertilizer subsidies directly to farmers.

Increased Capex for Sustainable Growth

Implementing these measures, according to CII, could create room for the government to support sustainable growth by increasing capital expenditure (capex) by 20% to ₹12 trillion. While a moderation from the growth in the last two years, this compares favorably with the 12% growth in the pre-pandemic period of FY16 to FY20.


As the government navigates economic challenges, adhering to fiscal deficit targets and implementing CII's recommendations could provide a roadmap for sustaining growth. The call for a delicate balance between fiscal responsibility and economic expansion is crucial in these uncertain times.

Also Read: The Government Predicts That India's GDP Will Grow By 7.3% in the 23-2024 Financial Year