India’s Union Budget has outlined a sharp increase in government borrowing for the next financial year, signalling a heavier supply of bonds as the government pushes growth priorities amid global uncertainty, as per Reuters.
According to the budget tabled in Parliament on Sunday, the federal government plans gross borrowings of ₹17.2 trillion, or $187.6 billion, in the 2026–27 fiscal year.
This represents a 17% increase over the current year’s borrowing of ₹14.61 trillion. Net borrowing is also set to rise to ₹11.73 trillion from ₹11.33 trillion in the ongoing fiscal year. India’s fiscal year runs from April to March.
The government has shifted its fiscal strategy towards a debt-to-GDP ratio target and aims to bring this ratio down to 55.6% in the next fiscal year.
This trajectory corresponds to a projected fiscal deficit of 4.3% of gross domestic product. The deficit metric is closely tracked by markets for its implications on borrowing requirements, debt sustainability and overall investor confidence.
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With planned borrowings of ₹17.2 trillion in FY 2026–27, the government has set the stage for increased bond supply, placing greater focus on market absorption capacity and the role of central bank operations in managing yield movements.
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Published on: Feb 2, 2026, 11:18 AM IST
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