S&P: Fiscal discipline intact; FY27 deficit target achievable

New Delhi: S&P Global Ratings on Monday said it is confident that the Indian government will achieve its 4.3 per cent fiscal deficit target for FY27 despite a projected dip in goods and services tax (GST) receipts following the rate streamlining in September 2025. The Union Budget signals a firm commitment to fiscal discipline, strengthening a trajectory of steady consolidation that aligns with global expectation, the global rating agency said. By maintaining a clear roadmap toward narrowing the fiscal deficit targeting 4.4 per cent of GDP for FY26 and 4.3 per cent for FY27, the central government is signaling a balance between growth and responsible spending. “We believe India (BBB/Stable/A-2) will hit its fiscal 2027 deficit target despite the government budgeting for lower Goods and Services Tax (GST) receipts, following the streamlining of GST rates in September 2025. There is upside to GST revenues coming from stronger consumption and higher collection efficiency, in our view,” S&P said.