Govt stays on fiscal path, deficit seen lower at 4.3%

New Delhi: Continuing on the path of fiscal consolidation, Finance Minister Nirmala Sitharaman on Sunday pegged fiscal deficit at 4.3 per cent of GDP for the next fiscal as against 4.4 per cent for the financial year ending March 2026. “Government has been delivering on our fiscal commitments consistently without compromising on social needs. To strive towards accepted standards of fiscal management, in Budget 2025-26, I had indicated that the Central Government would target reaching a debt-to-GDP ratio of 50±1 per cent by 2030-31,” she said while announcing Budget 2026-27 in the Lok Sabha. In line with this, she said, the debt-to-GDP ratio is estimated to be 55.6 per cent of GDP in Budget Estimate 2026-27, compared to 56.1 per cent of GDP in Revised Estimate (RE) 2025-26. A declining debt-to-GDP ratio will free up resources for priority sector expenditure by reducing the outgo on interest payments, she said. “I am happy to inform this august House that I have fulfilled my commitment made in FY 2021-22 to reduce fiscal deficit below 4.5% of GDP by 2025-26. In RE 2025-26, the fiscal deficit has been estimated at par with the BE of 2025-26 at 4.4 per cent of GDP.”