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

Economic survey for age bar for social media access, cutting online classes

Economic survey for age bar for social media access, cutting online classes

Economic Survey calls for tackling rising digital addiction as it hits academic performance, productivity

Economic Survey calls for tackling rising digital addiction as it hits academic performance, productivity

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

No jurisdiction to hear Sameer Wankhede's defamation plea over The Ba***ds of Bollywood: Delhi HC

No jurisdiction to hear Sameer Wankhede's defamation plea over The Ba***ds of Bollywood: Delhi HC

Pakistan's T20 WC boycott unlikely, team to leave for Colombo on Feb 2: Sources

Pakistan's T20 WC boycott unlikely, team to leave for Colombo on Feb 2: Sources

Bhagwant Mann outlines Punjab's free healthcare and welfare initiatives in Gujarat

Bhagwant Mann outlines Punjab's free healthcare and welfare initiatives in Gujarat

Labour codes to play key rule to boost employment, Pvt Cos investment needed: Economic Survey

Labour codes to play key rule to boost employment, Pvt Cos investment needed: Economic Survey

Govt says 2.22 crore people provided jobs at 18,000 job fairs across country in past year

Govt says 2.22 crore people provided jobs at 18,000 job fairs across country in past year

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

Rupee valuation does not accurately reflect India's stellar economic fundamentals: Economic Survey

Rupee valuation does not accurately reflect India's stellar economic fundamentals: Economic Survey

'40 pc gig workers earn below Rs 15K/month'; Economic Survey advocates minimum per-task earnings

'40 pc gig workers earn below Rs 15K/month'; Economic Survey advocates minimum per-task earnings

Economy on stable footing, likely to expand by 6.8-7.2 pc in FY27: Economic Survey

Economy on stable footing, likely to expand by 6.8-7.2 pc in FY27: Economic Survey

Ban marketing of ultra-processed foods from 6 am to 11 pm, suggests Economic Survey

Ban marketing of ultra-processed foods from 6 am to 11 pm, suggests Economic Survey

Rising exports reflective of acceptance of India-made cars across global markets: Economic Survey

Rising exports reflective of acceptance of India-made cars across global markets: Economic Survey

ADVERTISEMENT

editorji-whatsApp

More videos

Steel sector faces challenges of international price disparity, raw material security: Economic Survey

Steel sector faces challenges of international price disparity, raw material security: Economic Survey

Ongoing trade talks with US expected to conclude during the year: Economic Survey

Ongoing trade talks with US expected to conclude during the year: Economic Survey

Finance Minister Sitharaman tables Economic Survey 2025-26 in Lok Sabha

Finance Minister Sitharaman tables Economic Survey 2025-26 in Lok Sabha

Silver prices breach Rs 4 lakh per kg mark in futures trade amid strong global cues

Silver prices breach Rs 4 lakh per kg mark in futures trade amid strong global cues

Deepinder Goyal steps down as Eternal group CEO, Albinder Dhindsa takes charge

Deepinder Goyal steps down as Eternal group CEO, Albinder Dhindsa takes charge

WEF 2026: Adani Group sets out Rs 6 lakh cr investment blueprint for India

WEF 2026: Adani Group sets out Rs 6 lakh cr investment blueprint for India

IMF raises India's GDP growth projection to 7.3 pc for FY26

IMF raises India's GDP growth projection to 7.3 pc for FY26

Blinkit drops '10-minute delivery' claim; Swiggy, Zepto may follow suit

Blinkit drops '10-minute delivery' claim; Swiggy, Zepto may follow suit

Passenger vehicle dispatches rise 27 pc year-on-year in December 2025: SIAM

Passenger vehicle dispatches rise 27 pc year-on-year in December 2025: SIAM

US ambassador-designate Sergio Gor says India to be invited as full member of PaxSilica next month

US ambassador-designate Sergio Gor says India to be invited as full member of PaxSilica next month

Categories

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