Consolidation pace moderates: Debt-to-GDP cut by 50 bps, fiscal deficit 1 bps in FY27
The Union government has announced a new fiscal architecture with the goal of reducing the debt-to-GDP ratio to 50% by 2031. This will allow for more spending in priority sectors. The 2025-26 budget includes tax cuts, increased revenue from disinvestment and asset monetisation, and a projected 10% growth in nominal GDP. The fiscal deficit is estimated at 4.3% of GDP.