India needs to retain “fiscal firepower” to effectively manage exogenous shocks as there has been no favourable change in global headwinds and associated risks since the presentation of the Union Budget in February, the Finance Ministry said on Tuesday.  

The ministry had at the time cited “unprecedented global uncertainties that may adversely affect medium-term projections” to justify not placing fiscal projections for 2024-25 and 2025-26 in Parliament at the time of presenting the Union Budget.  

On Tuesday, the ministry conveyed its inability to release the Medium Term Expenditure Framework (MTEF), mandated by the Fiscal Responsibility and Budget Management (FRBM) Act of 2003. The MTEF, it said, required assumptions to be made about the growth rate of the economy and revenue receipts to enable “meaningful expenditure projections and rolling targets” for the next two years. 

“Since the presentation of the Union Budget for FY 2023-24 in February, there has not been any significant and favourable change in global headwinds and associated risks. Therefore, amidst aforesaid facts, the medium term projections are not feasible,” it noted.  

“Further, effective management of exogenous shocks and global uncertainties necessitates additional flexibility for the Government in terms of expenditure management and fiscal consolidation. This is necessary to ensure that the Government retains necessary fiscal firepower to respond to contingencies that may arise during uncertain times,” the ministry said in a statutory statement under the FRBM law.