Fiscal Deficit Targeted at 4.4% in FY26 as Revenue Deficit Hits 16-Year Low

Last updated: 30 January 2026


Quick Summary
The Economic Survey 2025-26 reveals India's economy remains stable amidst global turbulence, largely due to a calibrated fiscal strategy. The fiscal deficit is projected at 4.4% of GDP for FY26, a decrease from 4.8% in FY25. Notably, the revenue deficit has reached its lowest point since FY09, standing at 0.8% in FY26. This fiscal prudence is supported by improved revenue collection efficiency and a sustained increase in capital expenditure.

A CALIBERATED FISCAL STRATEGY HAS ANCHORED ECONOMIC STABILITY AMID GLOBAL ECONOMIC TURBULENCE: ECONOMIC SURVEY 2025-26 SUSTAINED INCREASE IN CAPEX AND RESILIENT REVENUE MOBILISATION KEY TO FISCAL CONSOLIDATION SASCI SCHEME HELPS STATES TO MAINTAIN CAPITAL EXPENDITURE AT 2.4%; Rs 4.5 LAKH CRORES AL
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FAQ :

The fiscal deficit is budgeted at 4.4% of GDP in FY26, down from 4.8% in FY25.

The revenue deficit is at its lowest level since FY09, budgeted at 0.8% in FY26.

Revenue receipts have increased due to better collection efficiency and curbing leakages through technology-driven measures, rising to 9.2% of GDP in FY25.

Effective capital expenditure has increased significantly, rising from an average of 2.7% of GDP pre-pandemic to 4.3% in FY26.

The government aims to achieve a debt-to-GDP ratio of around 50% by FY31, with the current ratio standing at 55.7% in FY25.

Gross GST revenue for April-December FY26 was Rs 17.4 lakh crore, showing a year-on-year growth of 6.7% compared to the previous year.




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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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