‘Impressively reduced the fiscal deficit’: Amitabh Kant on Union Budget 2026

Union Budget 2026: Former CEO of NITI Aayog and ex-Sherpa of G20, Amitabh Kant, congratulated Finance Minister Nirmala Sitharaman for “impressively” reducing the fiscal deficit to 4.3 per cent of the GDP. He said that the high-level banking committee announced in the budget must focus on lowering the cost of capital for private enterprises. 

“Kudos to Nirmala Sitharaman for successfully upholding her commitment to fiscal discipline! She has impressively reduced the fiscal deficit to 4.3 per cent of GDP, a significant drop from the peak of 9.2 per cent in FY21,” he said. 

“This achievement has not only strengthened confidence in our economy and created a more favourable environment for credit to flow to the private sector,” he said.

Sitharaman announced an estimated fiscal deficit of 4.3 per cent of GDP for the financial year 2026-27, down from 4.4 per cent projected for 2025-26. Fiscal deficit in absolute terms is projected to be Rs 16,95,768 crore for FY27.

Finance Minister Nirmala Sitharaman stated, "I am happy to inform this august House that I have fulfilled my commitment made in FY 2021-22 to reduce fiscal deficit below 4.5 per cent of GDP by 2025-26. In RE 2025-26, the fiscal deficit has been estimated at par with the BE of 2025-26 at 4.4 per cent of GDP."

The fiscal deficit will be financed through a combination of market borrowings and other sources. Net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. "The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 17.2 lakh crore," she said.

The government has committed to lowering central government debt as a share of GDP, targeting a debt-to-GDP ratio of about 50±1 per cent by March 31, 2031. The debt-to-GDP ratio is forecast at 55.6 per cent in the 2026-27 Budget Estimate, down from 56.1 per cent in the Revised Estimate for 2025-26.

A fiscal deficit in the range of 3-4 per cent is considered a desirable target for a developing economy such as India.