16th Finance Commission recommends 6.5% fiscal deficit
after close1 source ↓written by the desknot a recommendation
- emphasized the need
- 16th Finance Commission
- gradual reduction
- 3.5%
- deficit annually
- 3%
The 16th Finance Commission emphasized the need for high capital expenditure from both the Centre and states to enhance infrastructure over the next two decades. It projected a combined fiscal deficit of 6.5% for FY27-FY31, with the Centre aiming for a gradual reduction to 3.5%. States are expected to maintain a 3% deficit annually, excluding the impact of interest-free loans for capital projects.
This fiscal strategy is crucial for achieving the desired infrastructure development, potentially impacting market sentiment and investment flows in related sectors.
Not investment advice. For informational purposes only.