Finance Minister Nirmala Sitharaman projected the fiscal deficit for FY 2026–27 at 4.3% of GDP, marginally lower than the 4.4% estimated for the current year, demonstrating sustained fiscal prudence during her Union Budget presentation.
Robust Revenue and Expenditure Framework
Net tax receipts are estimated at ₹28.7 lakh crore, supporting ₹1.4 lakh crore tax devolution to states while maintaining the 41% vertical share recommended by the 16th Finance Commission. Total budget outlay reaches ₹53.5 lakh crore, balancing growth investments with consolidation goals.
Declining Debt Trajectory Commitment
From FY 2026–27, fiscal policy prioritizes maintaining deficits that steadily reduce central government debt-to-GDP ratio, currently at 57% within the general government’s 85% level. This glide path enhances sovereign credibility and creates fiscal space for strategic capex and social programs.
Sustainable Growth Balancing Act
The 3-4% deficit range proves optimal for India’s expansion phase, funding ₹12.2 lakh crore infrastructure while ensuring long-term stability. This disciplined approach complements sectoral missions, state partnerships, and private investment revival for inclusive Viksit Bharat realization.
