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Finance Minister Nirmala Sitharaman presented her ninth consecutive Union Budget on February 1, aiming to accelerate and sustain strong economic growth while enhancing business competitiveness amid a volatile global environment.
While presenting the Budget, the Finance Minister said the "Reform Express" is on its way and the government will keep the momentum. "Our Kartavya is to ensure every family, community, and sector has access to resources, amenities and opportunities," she said.
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The fiscal deficit target has been set at 4.3% of GDP for 2026-27, reaffirming the government’s commitment to fiscal consolidation while continuing to prioritise capital spending to support growth.
Capital Expenditure (Capex)
The Finance Minister proposed to raise capex target to Rs 12.2 lakh crore for FY27 from Rs 11.2 lakh crore earmarked for current fiscal.
Debt Roadmap
India will target a debt-to-GDP ratio of 55.6% of gross domestic for the fiscal year 2026-27, Finance Minister Nirmala Sitharaman said, down from the near 56.1% in the current year.
In her previous Budget, Sitharaman said fiscal policy from FY27 onwards would prioritise a steady reduction in the debt-to-GDP ratio. Markets will seek greater clarity on the timeline and strategy to bring general government debt closer to the 60% of GDP benchmark. At present, total government debt is around 85% of GDP, with the Centre accounting for roughly 57%.
Borrowing Programme
The government intends to borrow Rs 11.7 lakh crore in FY27 from dated securities to fund its fiscal deficit
Tax Revenue
Gross tax collections for FY26 are estimated at ₹42.7 lakh crore, reflecting growth of about 11% over FY25.
• Direct taxes: ₹25.2 lakh crore
• Indirect taxes: ₹17.5 lakh crore
GST Collections
GST revenue is projected at ₹11.78 lakh crore in FY26, up 11% year-on-year. FY27 estimates will be key, particularly as rate adjustments since September 2025 are expected to boost consumption and compliance.
Nominal GDP Growth
Nominal GDP growth for FY26 was initially projected at 10.1%, but was later revised to about 8% due to lower-than-expected inflation. For FY27, the Budget may peg nominal growth at 10.5–11%, offering cues on growth and inflation assumptions.
Inflation Outlook
CPI inflation averaged around 1.7% in FY26 (April–December), aided by easing food and fuel prices. Inflation is expected to normalise toward the RBI’s 4% target in FY27, shaping Budget priorities and interest-rate expectations.
Spending Priorities
Attention will also be on allocations for flagship schemes such as G RAM G, along with social sectors like health and education, which are expected to remain central to the government’s growth and inclusion strategy.
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Here are the key numbers to watch out:
Fiscal DeficitThe fiscal deficit target has been set at 4.3% of GDP for 2026-27, reaffirming the government’s commitment to fiscal consolidation while continuing to prioritise capital spending to support growth.
Capital Expenditure (Capex)
The Finance Minister proposed to raise capex target to Rs 12.2 lakh crore for FY27 from Rs 11.2 lakh crore earmarked for current fiscal.
Debt Roadmap
India will target a debt-to-GDP ratio of 55.6% of gross domestic for the fiscal year 2026-27, Finance Minister Nirmala Sitharaman said, down from the near 56.1% in the current year.
In her previous Budget, Sitharaman said fiscal policy from FY27 onwards would prioritise a steady reduction in the debt-to-GDP ratio. Markets will seek greater clarity on the timeline and strategy to bring general government debt closer to the 60% of GDP benchmark. At present, total government debt is around 85% of GDP, with the Centre accounting for roughly 57%.
Borrowing Programme
The government intends to borrow Rs 11.7 lakh crore in FY27 from dated securities to fund its fiscal deficit
Tax Revenue
Gross tax collections for FY26 are estimated at ₹42.7 lakh crore, reflecting growth of about 11% over FY25.
• Direct taxes: ₹25.2 lakh crore
• Indirect taxes: ₹17.5 lakh crore
GST Collections
GST revenue is projected at ₹11.78 lakh crore in FY26, up 11% year-on-year. FY27 estimates will be key, particularly as rate adjustments since September 2025 are expected to boost consumption and compliance.
Nominal GDP Growth
Nominal GDP growth for FY26 was initially projected at 10.1%, but was later revised to about 8% due to lower-than-expected inflation. For FY27, the Budget may peg nominal growth at 10.5–11%, offering cues on growth and inflation assumptions.
Inflation Outlook
CPI inflation averaged around 1.7% in FY26 (April–December), aided by easing food and fuel prices. Inflation is expected to normalise toward the RBI’s 4% target in FY27, shaping Budget priorities and interest-rate expectations.
Spending Priorities
Attention will also be on allocations for flagship schemes such as G RAM G, along with social sectors like health and education, which are expected to remain central to the government’s growth and inclusion strategy.
