FM Sitharaman cuts fiscal deficit to 4.4% of GDP
Updated: Feb 1st, 2025
Finance Minister Nirmala Sitharaman on Saturday presented the Budget 2025-26 in Parliament which aims to give a big push to employment-led growth with its focus on the agricultural and rural sector, MSMEs, and exports, while sticking to the fiscal consolidation path to ensure stability in the economy.
She has kept the budget deficit target on a declining path to 4.4% of GDP in 2025-26 from 4.8% of GDP in 2024-25.
The net market borrowing for the budget has been fixed at ₹1.54 crore while the rest of the funds will come from small savings schemes, the Finance Minister said.
The government’s gross borrowing target for FY26 was revised upwards by 5.7% to ₹14.82 lakh crore. Earlier, it was set at ₹14.01 lakh crore for FY25.
"In the July Budget, I committed to staying the 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," FM Sitharaman said.
"Coming to 2025-26, the total receipts other than borrowings and the total expenditure are estimated at ₹34.96 lakh crore and ₹50.65 lakh crore, respectively. The net tax receipts are estimated at ₹28.37 lakh crore. The fiscal deficit is estimated to be 4.4% of GDP," the Finance Minister added.
In the FY'25 Budget, the government projected gross tax revenue at ₹38.40 lakh crore, marking an 11.72 per cent increase from FY'24. This includes ₹22.07 lakh crore from direct taxes (personal income and corporate tax) and ₹16.33 lakh crore from indirect taxes (customs, excise, GST).
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