The central government has maintained its fiscal consolidation roadmap in the Union Budget 2025, setting the fiscal deficit target for 2025-26 at 4.4% of GDP. This aligns with the government’s commitment to bringing the deficit below 4.5% by FY26, as outlined under the Fiscal Responsibility and Budget Management (FRBM) Act.
For the current financial year ending March 31, the government has revised the fiscal deficit estimate to 4.8%, down from the 4.9% projected earlier. The reduction is likely aided by lower capital expenditure and a higher-than-expected dividend from the central bank.
Total receipts
Finance Minister Nirmala Sitharaman said the revised estimate for total receipts, excluding borrowings, stands at Rs 31.47 lakh crore, with net tax receipts at Rs 25.57 lakh crore. The revised total expenditure is pegged at Rs 47.16 lakh crore, including Rs 10.1 lakh crore in capital spending. For FY26, the government expects total receipts (excluding borrowings) to be Rs 34.96 lakh crore, with total expenditure projected at Rs 50.65 lakh crore. Net tax receipts are estimated at Rs 28.37 lakh crore.
Union Finance Minister Nirmala Sitharaman is set to table the Union Budget 2025 today at 11 AM, marking her eighth consecutive budget.
The government plans to borrow Rs 14.82 lakh crore from the debt market in FY26, following a gross borrowing of Rs 14.01 lakh crore in the current fiscal.The Indian economy is projected to grow at 6.4% in FY25, marking a four-year low and a sharp decline from the 8.2% growth recorded in the previous year, according to the government’s first advance estimates. The nominal GDP growth estimate for FY25 stands at 9.6%, lower than the 10.5% projected in the Budget. Economists at Goldman Sachs and Standard Chartered had forecast India’s FY26 fiscal deficit to be in the range of 4.4-4.6%.
