New Delhi: Finance Minister Nirmala Sitharaman Sunday said the government expects the fiscal deficit to be at 4.3 per cent of the GDP in 2026-27, lower than 4.4 per cent projected for the current financial year.
In her 2026-27 Budget speech, Sitharaman also said the government will provide Rs 1.4 lakh crore as tax devolution amount to the states in the next financial year while the net tax receipts is estimated at Rs 28.7 lakh crore.
The size of the Budget for 2026-27 is pegged at Rs 53.5 lakh crore. In 2026-27, the fiscal deficit is estimated at 4.3 per cent, the minister said as the government moves on the fiscal prudence path of debt consolidation.
The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal (April 2025 to March 2026 or FY26), is estimated at 4.4 per cent of GDP.
The finance minister, in her 2024-25 budget speech, had stated that from 2026-27 onwards, fiscal policy would endeavour to maintain the fiscal deficit in a way that the central government debt is on a declining path as a percentage of GDP.
The general government debt-to-GDP ratio was 85 per cent in 2024, which included central government debt of 57 per cent.
A fiscal deficit of 3-4 per cent is considered comfortable and a desirable target for a growing, developing economy like India, aiming to balance economic expansion with financial stability.
In the speech Sunday, Sitharaman also said the new Income Tax Act, 2025 will be implemented from April 1, and the rules and tax returns forms will be notified shortly.
Union Budget 2026-27 Highlights:
The following are the highlights of the Union Budget 2026-27 presented by Finance Minister Nirmala Sitharaman in the Lok Sabha.
* No change in Income Tax rates
* Securities Transaction Tax (STT) raised on futures and options (F&O) to 0.05 pc and 0.15 pc
* TCS on sale of overseas tour packages slashed to 2 pc
* TCS on overseas education, medical expenses under LRS (Liberalised Remittance Scheme) cut to 2 pc
* New Income Tax Act, 2025, to be implemented from April 1; rules, forms to come soon
* ITR filing date for non-audit businesses extended by a month till August 31
* Tax holiday up to 2047 for any foreign company for providing services globally from data centres in India
* Fiscal deficit pegged at 4.3 pc of GDP in FY27, lower than 4.4 per cent in FY26
* Debt-to-GDP to be cut to 55.6 pc from 56.1 pc in the current fiscal year
* Total Budget size at Rs 53.5 lakh crore
* Govt capital expenditure hiked to Rs 12.2 lakh crore from Rs 11.11 lakh crore in FY26
* Rs 1.4 lakh crore to be devolved to states as tax share.
* Net tax receipts estimated at Rs 28.7 lakh crore
* Gross market borrowings estimated at Rs 17.2 lakh crore
* Budget focuses on 3 Kartavyas — accelerating growth, fulfilling aspirations, and Sabka Sath, Sabka Vikas
* Reform express on track, over 350 reforms rolled out
* Proposes Rs 10,000 crore SME Growth fund to create future champions
* Trust-based systems for Customs, advance ruling validity period extended to 5 years
* High-level committee to increase the services sector contribution to 10 pc by 2047.
PTI
