Countdown to Union Budget 2024: Fiscal Deficit, Borrowings and GDP

Introduction: Union Budget 2024

As the anticipation builds around Union Budget 2024, CNBC TV18 hosted a panel discussion featuring prominent economists to delve into the key expectations for the upcoming budget. Latha Venkatesh moderated the discussion, engaging in a conversation with experts including Samiran Chakrabarty of Citi, Soumya Kanti Ghosh of SBI, Kaushik Das of Deutsche Bank, and R-Kavita Rao of NIPFP. In this article, we will analyze the insights shared by the experts regarding fiscal deficit expectations, market dynamics, and the overall economic outlook.

Fiscal Deficit Expectations: Union Budget 2024

The discussion opened with a poll on fiscal deficit expectations for the forthcoming fiscal year, with varying opinions among the economists. Samiran Chakrabarty expressed a pragmatic view, suggesting that achieving a 5.5% fiscal deficit might not be a cause for concern, given the unique circumstances of the year. He emphasized the global Bond index inclusion, which is expected to generate an extra demand of $25 billion for bonds. Chakrabarty argued that a marginally higher fiscal deficit may not pose a significant challenge, especially considering the government’s historical credibility in presenting fiscal numbers.

Soumya Kanti Ghosh echoed similar sentiments, highlighting the historical trend of revisions in fiscal deficit numbers between interim budgets and the actual budgets. He suggested that the government might announce a 5.5% fiscal deficit, with the possibility of the number declining later due to statistical artifacts and an anticipated higher GDP growth rate.

Countdown to Union Budget 2024

Kaushik Das, on the other hand, emphasized the importance of sticking to the fiscal consolidation agenda. He argued that achieving a 5.3% fiscal deficit is feasible and crucial, especially with the opportunity provided by Bond index inclusion. Das stressed the need to demonstrate seriousness about reaching the 4.5% fiscal deficit target in the future.

Market Dynamics and Borrowings: Union Budget 2024

The experts emphasized that the market’s reaction would depend on the expected market borrowings. Regardless of whether the fiscal deficit is 5.3% or 5.5%, the crucial factor is the magnitude of net and gross market borrowings. If the gross market borrowings exceed expectations, it could lead to a market sell-off, irrespective of the fiscal deficit number.

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Nominal GDP Projections: Union Budget 2024

The panel discussed the significance of nominal GDP projections, considering their impact on the fiscal deficit, which is a percentage of the nominal GDP. The advanced estimates, indicating a lower nominal GDP than budgeted, raised questions about real growth and inflation assumptions. The experts suggested a nominal GDP projection of at least 10.5% to 11%, aligning with the expected economic growth and positive wholesale inflation.


As the countdown to Union Budget 2024 continues, economists remain optimistic about the government’s ability to manage fiscal deficits and demonstrate prudence in economic decision-making. The discussion highlighted the delicate balance between meeting fiscal targets, market dynamics, and the need for credible economic projections. Investors and analysts will be closely watching the budget announcement for cues on the government’s fiscal stance and its impact on the broader economy.

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