News that fits you

Highlights

  • Central government fiscal deficit target set at 4.4% of GDP
  • Capital expenditure share rose to 22.6% of total spending
  • Sovereign rating upgrades reflect market confidence in fiscal discipline

Latest news

Haier Launches HQLED P7 Pro Series TVs With Google Gemini, 50W Audio And AI Picture Enhancements

Haier Launches HQLED P7 Pro Series TVs With Google Gemini, 50W Audio And AI Picture Enhancements

Nothing's Latest Pokémon Teasers Hint At New Hardware, RCB Collaboration May Also Be In The Works

Nothing's Latest Pokémon Teasers Hint At New Hardware, RCB Collaboration May Also Be In The Works

OnePlus N6 Set To Debut With Massive 8,000mAh Battery And Long-Term Performance Focus

OnePlus N6 Set To Debut With Massive 8,000mAh Battery And Long-Term Performance Focus

Roblox Introduces Age-Based Accounts for Younger Users, Expands Parental Controls Globally

Roblox Introduces Age-Based Accounts for Younger Users, Expands Parental Controls Globally

IIFL Capital Launches Algo Marketplace with Over 100 Ready-Made Strategies

IIFL Capital Launches Algo Marketplace with Over 100 Ready-Made Strategies

LUMIQ Raises INR 50 Crore Pre-Series B to Become the AI Decision Layer for Financial Services

LUMIQ Raises INR 50 Crore Pre-Series B to Become the AI Decision Layer for Financial Services

Tay Keith, producer behind Travis Scott's 'Sicko Mode' dies at 29

Tay Keith, producer behind Travis Scott's 'Sicko Mode' dies at 29

GenAI could lift realty sales velocity by up to 50%, speed up launches by 30%: Report

GenAI could lift realty sales velocity by up to 50%, speed up launches by 30%: Report

Centre remains well on track to achieve 4.4 pc fiscal deficit target for FY26: Economic Survey

The Economic Survey 2025-26 highlights that India’s central government is on course to achieve a fiscal deficit of 4.4% of GDP, supported by increased capital spending, sovereign rating upgrades, and fiscal discipline.

Updated: Sep 02, 2022 10:53
|

PTI

Centre remains well on track to achieve 4.4 pc fiscal deficit target for FY26: Economic Survey

The government is well on track to meet the fiscal deficit target of 4.4 per cent of GDP estimated for the current financial year based on broad trends, the Economic Survey 2025-26 tabled in Parliament on Thursday said.

According to the survey prepared by Chief Economic Advisor V Anantha Nageswaran and team, the central government's fiscal trajectory stands out for combining consolidation with sustained public investment, earning three sovereign rating upgrades this year.

Between FY20 and FY25 (Provisional Actual), the share of capital spending in the total central government expenditure increased from about 12.5 per cent to 22.6 per cent, while effective capex as a share of GDP rose from roughly 2.6 per cent to 4 per cent, the survey said.

Even as states are overshooting their revenue deficit, the central government, through its Special Assistance to States for Capital Expenditure/Investment (SASCI), has successfully incentivised states to maintain capital expenditure at around 2.4 per cent of GDP, it said, adding the expansion of unconditional cash transfers across several states has contributed to rising revenue expenditure, with implications for fiscal space and public investment at the state level.

"Based on the broad trends observed during the year, the central government remains well on track to achieve its envisaged fiscal consolidation path, aiming to attain a fiscal deficit target of 4.4 per cent of GDP in FY26," it said.

As of November 2025, the Union government's fiscal deficit stood at 62.3 per cent of the Budget Estimates, it said.

Observing that markets have acknowledged and rewarded the government's commitment to fiscal discipline through lower sovereign bond yields, with the spread over US bonds declining by more than half, the survey said that, alongside a lower repo rate, these declining yields, which serve as benchmarks for borrowing costs across the economy, will themselves act as a fiscal stimulus.

Credit ratings agency S&P Ratings has acknowledged the credibility of and the commitment to the fiscal glide path, while upgrading India’s rating from ‘BBB-’ to ‘BBB’, it pointed out.

CareEdge Global, in initiating its coverage of India, also assigned a ‘BBB+’ rating, underscoring its robust economic performance and fiscal discipline, it added.

It is to be noted that the government overachieved its fiscal deficit target of 4.8 per cent against 4.9 per cent of GDP pegged for FY25.

The fiscal deficit declined from a high of 9.2 per cent of GDP in FY21 to 4.8 per cent of GDP in FY25 and is budgeted at 4.4 per cent of GDP in FY26.

Over the same period, the survey said, the revenue deficit as a proportion of GDP has narrowed steadily, reaching its lowest level since FY09, thereby leaving a greater allocation for capex and reflecting a sustained improvement in the quality of expenditure.

ADVERTISEMENT

Up Next

Centre remains well on track to achieve 4.4 pc fiscal deficit target for FY26: Economic Survey

Centre remains well on track to achieve 4.4 pc fiscal deficit target for FY26: Economic Survey

Honda Activa 6G: Everything You Need to Know Before Buying

Honda Activa 6G: Everything You Need to Know Before Buying

How much does a ULIP plan really cost? A break-down of all charges

How much does a ULIP plan really cost? A break-down of all charges

Centre plans to borrow Rs 8.20 lakh cr from market in first half of FY27

Centre plans to borrow Rs 8.20 lakh cr from market in first half of FY27

Reliance denies buying Iranian oil amid US sanctions waiver

Reliance denies buying Iranian oil amid US sanctions waiver

Premium petrol price up Rs 2, industrial diesel up Rs 22; no change in normal petrol, diesel rates

Premium petrol price up Rs 2, industrial diesel up Rs 22; no change in normal petrol, diesel rates

ADVERTISEMENT

editorji-whatsApp

More videos

India's GDP expected to register over 8 pc growth in Sep-Dec: Report

India's GDP expected to register over 8 pc growth in Sep-Dec: Report

Govt announces seven measures to help boost exports

Govt announces seven measures to help boost exports

RBI keeps interest rates on hold after US trade deal boosts outlook

RBI keeps interest rates on hold after US trade deal boosts outlook

RBI proposes to compensate customers up to Rs 25,000 loss due to fraud

RBI proposes to compensate customers up to Rs 25,000 loss due to fraud

RBI raises GDP growth projection of Q1, Q2 of FY27

RBI raises GDP growth projection of Q1, Q2 of FY27

RBI pauses rate cuts, retains interest rate at 5.25 pc

RBI pauses rate cuts, retains interest rate at 5.25 pc

Rupee jumps 122 paise to close at 90.27 against US dollar on India-US trade deal

Rupee jumps 122 paise to close at 90.27 against US dollar on India-US trade deal

Stock markets cheer India-US trade deal: Sensex, Nifty surge 2.5 pc

Stock markets cheer India-US trade deal: Sensex, Nifty surge 2.5 pc

UPI transactions hit record high of Rs 230 lakh crore in 2025-26 till Dec: Govt

UPI transactions hit record high of Rs 230 lakh crore in 2025-26 till Dec: Govt

Explained: India-US trade deal, tariffs and trade benefits

Explained: India-US trade deal, tariffs and trade benefits

Categories

Editorji Technologies Pvt. Ltd. © 2022 All Rights Reserved.