FM Nirmala Sitharaman Pegs Fiscal Deficit at 4.4% for FY26

Finance Minister Nirmala Sitharaman has pegged the fiscal deficit for 2025-26 at an impressive 4.4 per cent of the GDP. While presenting the Union Budget for the year, she revised the fiscal deficit target for the current fiscal year to 4.8% from 4.9%.

The Union Ministry of Finance has been aggressively following the fiscal consolidation path after the fiscal deficit shot up to 9.2% as a share of GDP in 2020-21 due to the Covid-19 pandemic.

The Centre had set a target to bring the fiscal deficit to 4.5% by 2025-26. It was brought down to 5.6% last year due to bumper dividends from the Reserve Bank of India (RBI) and public sector enterprises.

Global agencies have taken notice, with ratings giant S&P upgrading India’s outlook from “stable” to “positive” in May last year.