Fiscal Deficit for 2026-27
Context:
The Union Budget for 2026-27 continues the government's path of fiscal consolidation, balancing deficit reduction with high capital expenditure.
Key Highlights
Fiscal Deficit Target:
The fiscal deficit is targeted at 4.3% of GDP for the financial year 2026-27.
This represents a reduction from the 4.4% recorded in the Revised Estimates for 2025-26.
Debt Management:
The Centre aims for a Debt-to-GDP ratio of 55.6% for 2026-27, down from 56.1% in the previous year.
The long-term goal is to reduce this ratio to 50% by 2031.
Capital Expenditure (Capex):
The budget allocates ₹12.2 lakh crore for capital expenditure, which is 11.5% higher than the previous year's revised estimates.
This allocation amounts to 4.4% of GDP, marking the highest level in the last 10 years.
Revenue Trends:
Gross Tax-to-GDP Ratio:
Experts note a moderation in fiscal consolidation due to a falling Gross Tax-to-GDP ratio, which is projected to decline to 11.2% in FY27.
Tax Receipts:
Net tax receipts are budgeted at ₹28.7 lakh crore (a 7.2% increase).
Gross corporate tax revenue is expected to grow by 11% to ₹12.3 lakh crore.
The budget does not propose any significant tax cuts for salaried or corporate taxpayers.