Finance Minister Nirmala Sitharaman on Sunday said that the debt-to-GDP ratio is estimated to be 55.6 per cent of GDP in 2026-27 (budget estimate or BE), compared to 56.1 per cent of GDP in 2025-26 (revised estimate or RE). A declining debt-to-GDP ratio will gradually free up resources for priority sector expenditure by reducing the outgo on interest payments.
"Government has been delivering on fiscal commitments consistently without compromising on social needs," FM Sitharaman said while presenting the Budget 2026-27 in the Parliament. Sitharaman informed the Parliament that the commitment made in FY 2021-22 to reduce fiscal deficit below 4.5 per cent of GDP by 2025-26 has been fulfilled.
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. In line with the new fiscal prudence path of debt consolidation, the fiscal deficit in BE 2026-27 is estimated to be 4.3 per cent of GDP. "The RE of the non-debt receipts are Rs 34 lakh crore, of which the Centre’s net tax receipts are Rs 26.7 lakh crore.
The Revised Estimate of the total expenditure is Rs 49.6 lakh crore, of which the capital expenditure is about Rs 11 lakh crore." The Finance Minister stated that the non-debt receipts and the total expenditure are estimated as Rs 36.5 lakh crore and Rs 53.5 lakh crore, respectively.
The Centre’s net tax receipts are estimated at Rs 28.7 lakh crore. "To finance the fiscal deficit, the 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 mentioned. The Finance Minister announced capital expenditure of Rs 12.2 lakh crore in the Budget for 2026-27, to boost big-ticket infrastructure projects for boosting growth and jobs in the economy. This represents an increase of 2.2 lakh crore over the corresponding figure of the previous fiscal year.