Union Budget 2026: Total expenditure estimated at Rs 54.1 lakh crore, 13.8% of GDP
Union Budget 2026: With expenditure estimated at 13.8% of GDP and the fiscal deficit seen at 4.16%, the Budget 2026-27 points to gradual consolidation rather than fiscal tightening.
- Feb 1, 2026,
- Updated Feb 1, 2026 10:15 AM IST
Budget 2026 | As Finance Minister Nirmala Sitharaman prepares to present the Union Budget for 2026-27 on February 1, India is expected to enter the Union Budget 2026-27 with strong real economic momentum, even as nominal growth remains subdued, according to a report by Sunidhi Securities & Finance Limited.
Against this backdrop, Finance Minister Nirmala Sitharaman is expected to present a ₹54.1 lakh crore Union Budget for FY2026-27, marking a year-on-year growth of 7.9 per cent. The report stated that the size of the Budget, measured through total expenditure (TE) as a percentage of GDP, remains the clearest indicator of the government’s fiscal intent.
This as the real GDP growth for FY26 is estimated at 7.4 per cent by the Central Statistical Office, underlining the resilience of the domestic economy.
Despite this strength, nominal GDP growth is estimated at around 8 per cent the slowest in nearly six years largely due to persistent disinflationary pressures.
Total expenditure
Total Expenditure averaged 14.8 per cent of GDP during FY23-FY25. In the Budget Estimates for FY26, total expenditure was placed at 14.2 per cent of GDP, amounting to ₹50.65 lakh crore. However, factoring in weaker nominal GDP growth and lower revenue buoyancy, the report pegged the Revised Estimates for FY26 at approximately 14.0 per cent of GDP, or ₹50.15 lakh crore.
For FY27, Total Expenditure is estimated at ₹54.1 trillion, implying a 7.9 per cent year-on-year increase. The report emphasised that this reflects a calibrated fiscal consolidation path rather than a move towards fiscal tightening. Expenditure is further projected to moderate to about 13.8 per cent of GDP in FY27, indicating a gradual consolidation in fiscal policy.
This fiscal trajectory, the report said, highlights the government’s commitment to preserving macroeconomic stability while continuing to support growth.
Fiscal deficit
On the fiscal deficit front, the budget target is projected at 4.16 per cent of GDP, translating to ₹16.37 lakh crore, compared with 4.4 per cent of GDP, or ₹15.69 lakh crore, in the Budget Estimates for FY26. While the deficit is expected to rise in absolute terms, the decline as a share of GDP signals continued progress towards fiscal consolidation.
The report also highlighted the impact of GST reforms implemented in September last year, describing them as a structural inflexion point. These reforms have driven a sharp recovery in urban demand and strengthened growth momentum during the second half of fiscal year 2026.
Track live Budget updates, breaking news, expert opinions and in-depth analysis only on BusinessToday.in
Budget 2026 | As Finance Minister Nirmala Sitharaman prepares to present the Union Budget for 2026-27 on February 1, India is expected to enter the Union Budget 2026-27 with strong real economic momentum, even as nominal growth remains subdued, according to a report by Sunidhi Securities & Finance Limited.
Against this backdrop, Finance Minister Nirmala Sitharaman is expected to present a ₹54.1 lakh crore Union Budget for FY2026-27, marking a year-on-year growth of 7.9 per cent. The report stated that the size of the Budget, measured through total expenditure (TE) as a percentage of GDP, remains the clearest indicator of the government’s fiscal intent.
This as the real GDP growth for FY26 is estimated at 7.4 per cent by the Central Statistical Office, underlining the resilience of the domestic economy.
Despite this strength, nominal GDP growth is estimated at around 8 per cent the slowest in nearly six years largely due to persistent disinflationary pressures.
Total expenditure
Total Expenditure averaged 14.8 per cent of GDP during FY23-FY25. In the Budget Estimates for FY26, total expenditure was placed at 14.2 per cent of GDP, amounting to ₹50.65 lakh crore. However, factoring in weaker nominal GDP growth and lower revenue buoyancy, the report pegged the Revised Estimates for FY26 at approximately 14.0 per cent of GDP, or ₹50.15 lakh crore.
For FY27, Total Expenditure is estimated at ₹54.1 trillion, implying a 7.9 per cent year-on-year increase. The report emphasised that this reflects a calibrated fiscal consolidation path rather than a move towards fiscal tightening. Expenditure is further projected to moderate to about 13.8 per cent of GDP in FY27, indicating a gradual consolidation in fiscal policy.
This fiscal trajectory, the report said, highlights the government’s commitment to preserving macroeconomic stability while continuing to support growth.
Fiscal deficit
On the fiscal deficit front, the budget target is projected at 4.16 per cent of GDP, translating to ₹16.37 lakh crore, compared with 4.4 per cent of GDP, or ₹15.69 lakh crore, in the Budget Estimates for FY26. While the deficit is expected to rise in absolute terms, the decline as a share of GDP signals continued progress towards fiscal consolidation.
The report also highlighted the impact of GST reforms implemented in September last year, describing them as a structural inflexion point. These reforms have driven a sharp recovery in urban demand and strengthened growth momentum during the second half of fiscal year 2026.
Track live Budget updates, breaking news, expert opinions and in-depth analysis only on BusinessToday.in