Govt Targets Lower Fiscal Deficit At 4.4 Per Cent In FY26, Revises Estimate For FY25 In Budget

Presenting the Union Budget 2025 on Saturday, Nirmala Sitharaman said that the government aims to reduce debt and target fiscal deficit at 4.4 per cent of the GDP in FY26.

The fiscal deficit increases when a government's expenditure exceeds the revenue generated by it in the specific fiscal year.

Source : ABPLIVE AI

Finance Minister Nirmala Sitharaman presented the Union Budget 2025 in the Parliament on Saturday. The minister noted that the government remained on course for fiscal consolidation.

“Our endeavour will be to keep the fiscal deficit each year such that the Central Government debt remains on a declining path as a percentage of the GDP,” Sitharaman said in her Budget speech.

Boosted by the improvement in revenue collection, the government reduced its fiscal deficit target to 4.8 per cent of the GDP for the current 2024-25 fiscal year (FY25), from the earlier estimate of 4.9 per cent in the budget.

Sitharaman also shared the revised estimates for FY25 in her presentation. “The Revised Estimate of the total receipts other than borrowings is Rs 31.47 lakh crore, of which the net tax receipts are Rs 25.57 lakh crore. The Revised Estimate of the total expenditure is Rs 47.16 lakh crore, of which the capital expenditure is about Rs 10.18 lakh crore,” the finance minister said.

	Revised Estimates (FY25)	Budget Estimates (FY26)
Fiscal Deficit	4.8%	4.4%
Total Expenditure	Rs 47.16 lakh crore	Rs 50.65 lakh crore
Total Receipts (Except Borrowings)	Rs 31.47 lakh crore	Rs 34.96 lakh crore
Net Tax Receipts	Rs 25.57 lakh crore	Rs 28.37 lakh crore

Budget Estimates For FY26

Sharing the Budget Estimates for the upcoming 2025-26 fiscal year (FY26), the minister said that total receipts other than borrowings is estimated at Rs 34.96 lakh crore, while the estimate for total expenditure stands at Rs 50.65 lakh crore. 

The net tax receipts are estimated to be at Rs 28.37 lakh crore for the next fiscal year, while gross market borrowings estimate stands at Rs 14.82 lakh crore. The government has also decided a fiscal deficit target of 4.4 per cent of the GDP in FY26.

Fiscal deficit represents the difference between the overall revenue and total expenditure of a government in a financial year. The fiscal deficit increases when a government's expenditure exceeds the revenue generated by it in the specific fiscal year. This metric is a good measure of understanding the financial health of any country.