Debt-to-GDP Ratio Estimated At 55.6% In BE 2026–27, Lower Than 56.1% In RE 2025–26: FM

New Delhi, Feb 1 (KNN) Presenting the Union Budget 2026–27 in Parliament, Finance Minister Nirmala Sitharaman said the government has consistently delivered on its fiscal commitments without compromising social sector spending.

She recalled that in Budget 2025–26, the Centre had set a target of achieving a debt-to-GDP ratio of 50±1 per cent by 2030–31, in line with globally accepted fiscal management standards.

The Finance Minister informed the House that the debt-to-GDP ratio is estimated at 55.6 per cent in Budget Estimates (BE) 2026–27, lower than 56.1 per cent in Revised Estimates (RE) 2025–26.

She noted that a sustained decline in debt levels would gradually free up resources for priority sector spending by reducing interest payment obligations.

Fiscal deficit remains the primary operational tool for debt management. Sitharaman said the government has fulfilled its commitment made in FY 2021–22 to reduce the fiscal deficit below 4.5 per cent of GDP by 2025–26.

In RE 2025–26, the fiscal deficit is estimated at 4.4 per cent of GDP, matching the Budget Estimate. Under the new fiscal consolidation path, the fiscal deficit for BE 2026–27 has been pegged at 4.3 per cent of GDP.

For 2025–26, non-debt receipts are estimated at Rs 34 lakh crore, including Rs 26.7 lakh crore as the Centre’s net tax receipts. Total expenditure is projected at Rs 49.6 lakh crore, with capital expenditure of about Rs 11 lakh crore.

For 2026–27, non-debt receipts are estimated at Rs 36.5 lakh crore, while total expenditure is projected at Rs 53.5 lakh crore. The Centre’s net tax receipts are estimated at Rs 28.7 lakh crore.

To finance the fiscal deficit, net market borrowings from dated securities are estimated at Rs 11.7 lakh crore, while the remaining financing will come from small savings and other sources. Gross market borrowings are estimated at Rs 17.2 lakh crore.

(KNN Bureau)