During the Corona period, the country's fiscal balance had deteriorated, which is now under control to a large extent. In such a situation, the industry wants the government to not only try more to improve the fiscal situation, but also prepare a fiscal policy keeping in mind the next 10 to 25 years.

In recent years, Brazil has released a long-term fiscal and financial policy agenda for 10 years and Britain for 25 years. This has been stated by the country's leading industry chamber CII in its memorandum sent to Finance Minister Nirmala Sitharaman.

Discussion round for budget begins

Last week, the Finance Minister started a round of discussions on the General Budget 2025. It has been said that the Finance Minister should work on the target of 4.9 percent for fiscal deficit in the year 2025 and 4.5 percent in the year 2026. One should not try to reduce the deficit too much.

CII has also raised the issue of increasing debt on the country, which is not usually talked about. It has said that to reduce the debt burden (ratio of debt to GDP), it is necessary to keep the fiscal deficit at a certain level. The central government should also implement a policy to reduce the debt level in the long term.

Tips to reduce your debt burden

CII suggests that we should move forward with the goal of reducing the debt burden to 50 percent of GDP by the year 2030-31. Steps should be taken to bring it down to 40 percent in the future. Let us tell you that in the year 2023, the debt ratio on India (compared to GDP) was 81.59 percent. This happened due to the impact on the revenue collection situation during the Corona period (year 2021 and year 2022).

CII says that if we bring down the debt level in the long term, it will not only improve the country's rating but also the interest rate in the country can be kept low, which will have huge benefits. To present the fiscal situation in a transparent manner, CII suggests that the central government should ensure that a fiscal stability report is presented every year.

Assessment of 10-25 years should be presented: CII

It should also determine how far the fiscal risk can grow in a particular situation i.e. in adverse conditions and how the situation can improve if fiscal stability is maintained. It can also present an assessment of the possible fiscal situation for the next 10 to 25 years. It should include the assessment of the possible impact by including many issues like the state of economic development, changes in technology, climate change etc.

Along with the central government, it should be mandatory for the state governments to follow the path of fiscal balance and they should also be obliged to issue state-based fiscal stability reporting. States should be allowed to borrow directly from the market. Along with this, a suggestion has been given that there should be a system for credit rating of states.