Finance Minister Nirmala Sitharaman announced a plan to decrease the fiscal deficit to 4.3% of GDP by 2026-27, emphasizing the government’s commitment to economic growth and stability. This follows the achievement of reducing the deficit to 4.4% in the previous fiscal year. The target aims to strike a balance between supporting economic momentum and maintaining stable public finances.
Sitharaman disclosed that the government plans to borrow Rs 11.7 lakh crore in the upcoming fiscal year to fund the fiscal deficit, with gross market borrowing set at Rs 17.2 lakh crore. Additionally, she highlighted a decrease in India’s debt-GDP ratio to 55.6% for the fiscal year 2026-27, down from 56.1% in the previous year. This reduction is expected to lower interest payments and enable more resources for development.
In a move to boost infrastructure and stimulate economic growth, the Finance Minister allocated Rs 12.2 lakh crore for capital expenditure in the 2026-27 Budget. This substantial increase aims to support major infrastructure projects and job creation. Furthermore, a new Infrastructure Risk Development Fund will be established to expedite the progress of large-scale projects.
The Budget for 2026-27 focuses on enhancing infrastructure, scaling up manufacturing in strategic sectors, and empowering MSMEs to drive economic growth. Sitharaman emphasized the importance of India’s integration with global markets, advocating for increased exports and foreign investments while maintaining fiscal prudence and monetary stability.
