Despite political pressures, India’s Finance Minister Nirmala Sitharaman is anticipated to target a further reduction in fiscal deficit to 5.3% of GDP in the FY25 budget, continuing the government’s commitment to fiscal consolidation. BofA Securities expects the government to prioritize capital expenditure-driven growth over expenditure compression. The brokerage highlights that digitization-led formalization has positively impacted fiscal metrics, contributing to tax buoyancy and curbing wasteful expenditure. The government had earlier aimed to bring fiscal deficit down to 4.5% by FY26. BofA Securities estimates a 10.5% growth in revenue receipts, emphasizing a focus on fiscal discipline.