What is the fiscal deficit target for India in FY26?

The fiscal deficit for FY26 is budgeted at 4.4% of GDP, with a roadmap for further reduction in subsequent years.

How much capital expenditure is planned in Budget 2026?

Capital expenditure for FY26 stands at ₹11.2 lakh crore and is expected to increase by 10-15%, potentially exceeding ₹12 lakh crore.

What are India's debt-to-GDP targets?

The government aims to steadily reduce the general government debt-to-GDP benchmark, which is currently around 85%.

Home / Business and Economy / India's Budget: Deficit, Debt, and Growth Focus

India's Budget: Deficit, Debt, and Growth Focus

31 Jan

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Summary

Fiscal deficit targeted at 4.4% of GDP for FY26, with plans for further reduction.
Capital expenditure to exceed ₹12 lakh crore to stimulate growth.
Government aims to reduce debt-to-GDP ratio, currently at 85%.

India's Budget: Deficit, Debt, and Growth Focus

Finance Minister Nirmala Sitharaman will present Budget 2026, emphasizing customs reforms and fiscal consolidation. This marks her ninth consecutive budget presentation, a record for any Indian finance minister.

The budget will focus on key financial metrics, with the fiscal deficit for FY26 budgeted at 4.4% of GDP. The government plans to reduce its debt-to-GDP ratio, currently around 85%, with specific targets expected for FY27 and beyond. This fiscal prudence is crucial as private investment remains cautious.

Capital expenditure (capex) for FY26 is set at ₹11.2 lakh crore and is anticipated to rise by 10-15%. This increased outlay aims to stimulate economic growth, with projections for FY27 nominal GDP growth between 10.5-11%. Inflation is expected to normalize towards the RBI's 4% target band.