New Delhi: Presenting the Union Budget 2026-27 in Parliament on Sunday, Union Finance Minister Nirmala Sitharaman said India is on course to achieve a debt-to-GDP ratio of around 50 percent by 2030-31, highlighting the government’s commitment to fiscal discipline while maintaining focus on social and developmental priorities.
Sitharaman said the government has consistently met its fiscal targets without compromising on key public services. In Budget Estimates (BE) 2026-27, the debt-to-GDP ratio is projected at 55.6 percent, down from 56.1 percent in Revised Estimates (RE) 2025-26, indicating a gradual reduction in debt servicing obligations and freeing resources for capital expenditure.
Fiscal Deficit and Expenditure
The Finance Minister highlighted that the fiscal deficit, a key instrument for debt management, has been maintained in line with the government’s commitment made in 2021-22 to keep it below 4.5 percent of GDP by 2025-26. The RE 2025-26 fiscal deficit stands at 4.4 percent of GDP, while the BE 2026-27 fiscal deficit is estimated at 4.3 percent of GDP.
Capital expenditure remains a major priority, with RE 2025-26 showing Rs 11 lakh crore out of a total expenditure of Rs 49.6 lakh crore allocated to infrastructure and development projects. For BE 2026-27, the total expenditure is projected at Rs 53.5 lakh crore, with non-debt receipts estimated at Rs 36.5 lakh crore and the Centre’s net tax collections expected to reach Rs 28.7 lakh crore.
Financing the Deficit
To meet the fiscal gap, the government plans net market borrowings of Rs 11.7 lakh crore from dated securities, supplemented by small savings and other sources. The total gross market borrowings are estimated at Rs 17.2 lakh crore for the upcoming financial year.
Sitharaman said these measures, including prudent debt management and targeted capital spending, will support economic growth while gradually reducing India’s debt burden.
