Context: The Union Government set the fiscal deficit target at 4.3 percent of GDP for 2026–27.
Fiscal Deficit Target
- Targeted at 4.3 percent of Gross Domestic Product
- Revised from 4.4 percent in 2025–26 estimates
- Reduction of ten basis points year-on-year
Debt-to-GDP Target
- Estimated at 55.6 percent of GDP in 2026–27
- Down from 56.1 percent in 2025–26 estimates
- Long-term goal of 50 percent by March 2031
Reason for Moderation
- Decline in gross tax to GDP ratio
- Ratio fell from 11.5 percent in FY25
- Reduced to 11.2 percent in FY27 estimates
Revenue Highlights
- Net tax receipts budgeted at ₹28.7 lakh crore
- Growth of 7.2 percent over 2025–26 estimates
- No major personal or corporate tax cuts announced
Tax Components
- Gross corporate tax targeted at ₹12.3 lakh crore
- Gross income tax targeted at ₹14.7 lakh crore
Expenditure Overview
- Total expenditure budgeted at ₹53.5 lakh crore
- Growth of 7.7 percent over 2025–26 estimates
Capital Expenditure
- Capex budgeted at ₹12.2 lakh crore
- Growth of 11.5 percent year-on-year
- Equals 4.4 percent of GDP
Basics- Types of Deficit
- Budget Deficit
- Total Expenditure minus Total Revenue
- Revenue Deficit
- Revenue Expenditure minus Revenue Receipts
- Fiscal Deficit
- Total Expenditure minus total non-debt receipts
- Equals Budget Deficit plus Borrowings
- Primary Deficit
- Fiscal Deficit minus Interest Payments
- Effective Revenue Deficit
- Revenue Deficit minus Grants for Capital Assets