FM Nirmala Sitharaman Projects Fiscal Deficit at 4.4% of GDP for FY26 in Union Budget 2025

Finance Minister Nirmala Sitharaman, in her Budget speech on Saturday, February 1, 2025, announced that the fiscal deficit for the fiscal year 2025–26 is estimated to be 4.4% of India’s Gross Domestic Product (GDP).

Sitharaman had previously stated that the government targets achieving a fiscal deficit of 4.5% in 2026–27. The government’s fiscal deficit represents the gap between its expenditure and income.

Revised Fiscal Deficit

Sitharaman also revised the fiscal deficit for the current fiscal year (April 2024–March 2025) to 4.8% of GDP, down from the previously estimated 4.9%.

Borrowing Details for FY26

The Finance Minister revealed that the gross market borrowing for FY26 is estimated at ₹14.82 lakh crore, with net market borrowing pegged at ₹11.54 lakh crore. For FY25, the gross borrowing was ₹14.01 lakh crore.

The borrowing numbers are closely watched by the market, particularly in light of lower dividends expected from the Reserve Bank of India (RBI) in FY26, compared to ₹2.11 lakh crore in FY25. Net tax receipts for FY26 are estimated at ₹28.37 lakh crore.

Aiming for Greater Prosperity

Sitharaman reiterated that the Budget aims to unlock India’s potential for greater prosperity, asserting that the Indian economy is the fastest-growing among all developing economies. This marks the 14th consecutive Budget presented under the Narendra Modi government since it came to power in 2014.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.