Budget 2026-27 Targets Fiscal Deficit At 4.3% Over Growth And Infrastructure Push

Finance Minister Nirmala Sitharaman, presenting the Union Budget 2026-27, projected a reduction in the fiscal deficit to 4.3 per cent of GDP.

She noted that the government successfully achieved the FY26 target of 4.4 per cent and continues to pursue fiscal consolidation to ensure stable economic growth. The fiscal deficit shows the gap between the government’s total expenditure and its total revenue.

To fund the fiscal gap, the government plans to borrow Rs 11.7 lakh crore in net terms through dated securities. It also plans gross market borrowing of Rs 17.2 lakh crore.

Sitharaman highlighted that India’s debt-to-GDP ratio fell to 56.1 per cent in FY26 and expects it to decline further to 55.6 per cent in FY27. This reduction will free resources for development and lower interest payments.

The Budget allocates Rs 12.2 lakh crore for capital expenditure, which is Rs 2.2 lakh crore more than FY26. The funds target highways, ports, railways, power projects, and seven strategic manufacturing sectors.

The government will set up an Infrastructure Risk Development Fund to speed up the execution of large projects. It will also implement policies to support and promote champion MSMEs.

Sitharaman emphasised that India must strengthen integration with global markets, boost exports, and attract foreign investment.

She stressed that the government’s focus on fiscal prudence, stable public finances, and strong public investment will sustain economic momentum, create jobs, and support long-term growth.

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