Presenting the Union Budget, Finance minister Nirmala Sitharaman pegged the fiscal deficit at 4.3 per cent of the Gross Domestic Product (GDP) for the year 2026-27, which is lower than the estimated 4.4 per cent in Budget Estimate (BE) 2025-26.
What is fiscal deficit?
The difference between total revenue and total expenditure of the government is called the fiscal deficit. It shows the total amount the government may need to borrow.
Presenting her record 9th straight budget, Sitharaman said the debt-to-GDP ratio is seen at 55.6 per cent in FY27, from 56.1 per cent in the current fiscal.
Key figures for FY27
Net Market Borrowing: Rs 11.7 lakh crore
Gross Market Borrowing: Rs 17.2 lakh crore
Non‑Debt Receipts: Rs 36.5 lakh crore
Net Tax Receipts: Rs 28.7 lakh crore
The debt-to-GDP ratio is estimated at 55.6 per cent in BE 2026–27, improving from 56.1 per cent in the Revised Estimates (RE) for 2025–26.
Previous figures
Last year, the Centre adjusted the FY25 fiscal deficit to 4.8 per cent of GDP, down from the previous 4.9 per cent and the earlier estimate of 5.1 per cent. The Centre also emphasised its goal of reducing the deficit to below 4.5 per cent by FY26. In the Budget on February 1, 2026, the Finance Minister lowered it further to 4.4 per cent.
Earlier, during the full Budget presented in July 2024, the government set the FY26 target at 4.5 per cent. This reflects ongoing progress toward fiscal consolidation, which is now revised to 4.4 per cent in the estimates.
