Finance Minister Nirmala Sitharaman revealed that the debt-to-GDP ratio is anticipated to decrease to 55.6% in 2026-27, compared to 56.1% in 2025-26. This reduction is expected to release funds for priority sector spending by lowering interest payments.
During the Budget 2026-27 presentation in Parliament, Sitharaman emphasized the government’s consistent fiscal responsibility while meeting social requirements. She highlighted the achievement of reducing the fiscal deficit below 4.5% of GDP by 2025-26, as committed in FY 2021-22.
In alignment with the strategy of debt consolidation, the fiscal deficit for 2026-27 is estimated at 4.3% of GDP, lower than the previous year. The Finance Minister outlined that the non-debt receipts and total expenditure are projected at Rs 36.5 lakh crore and Rs 53.5 lakh crore, respectively, with net tax receipts at Rs 28.7 lakh crore.
To support the fiscal deficit, net market borrowings from dated securities are expected to reach Rs 11.7 lakh crore, with additional funding from small savings and other sources. The Budget for 2026-27 allocates Rs 12.2 lakh crore for capital expenditure, aiming to enhance infrastructure projects and stimulate economic growth and employment opportunities.
