<h1>Government Plans to Cut Fiscal Deficit Below 4.5% of GDP by 2025-26 Amid Rising Expenditures and Borrowing.</h1> The pandemic has weakened revenue inflows while increasing government expenditure on essential relief for vulnerable populations. Revised estimates for 2020-21 show expenditures of Rs. 34.50 lakh crore, up from the initial Rs. 30.42 lakh crore, with a fiscal deficit at 9.5% of GDP. For 2021-22, expenditures are set at Rs. 34.83 lakh crore, with a fiscal deficit of 6.8% of GDP and a market borrowing target of Rs. 12 lakh crore. The government aims to reduce the fiscal deficit below 4.5% of GDP by 2025-26 through improved tax compliance and asset monetization. States' borrowing limits and revenue deficit grants have been adjusted accordingly.