India Targets 4.4% Fiscal Deficit for FY26

1 Feb 2025 , 12:04 PM

• India remains committed to fiscal consolidation, with the fiscal deficit target for FY26 set at 4.4% of GDP, down from 8% in FY25.
• The target is lower than the 5% estimate by economists in an MC poll.
• The government aims to reduce the deficit to 4.5% or lower by FY26, supporting India’s push for a credit rating upgrade.
• Despite calls to ease fiscal consolidation for economic growth, the government stayed on track.
• RBI’s ₹2.1 lakh crore bonus dividend and controlled spending helped maintain the FY25 fiscal target despite slower growth.
• India’s nominal GDP growth is estimated at 7% in FY25, below the 10.5% projection.
• In the first eight months of FY25, the fiscal deficit reached ₹8.5 lakh crore, exceeding last year’s 50.7% mark.