Union Budget 2026 Sets ₹12.2 Lakh Crore Capex Target and 4.3% Fiscal Deficit Goal
Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27, emphasizing capital expenditure (capex) to drive medium-term growth. The Centre has budgeted ₹12.2 lakh crore for capex, an 11.5% increase over the revised estimates of 2025-26. The fiscal deficit target is set at 4.3% of GDP, a moderation from the previous year's 4.4%. The budget aims for a debt-to-GDP ratio of 50% by 2031. This strategy prioritizes infrastructure and manufacturing to maintain economic momentum while adhering to a path of fiscal consolidation amidst global uncertainties and geopolitical volatility.
Key Points
- Capital expenditure is increased to ₹12.2 lakh crore to sustain public infrastructure-led growth.
- The fiscal deficit target for 2026-27 is set at 4.3% of GDP, down from 4.4% in the previous year.
- The government aims to reduce the debt-to-GDP ratio to 50% by 2031, with a leeway of 1% above or below.
- Total expenditure for the fiscal year is budgeted at ₹53.5 lakh crore, a 7.7% increase over revised estimates.
Exam Facts
- Capex target: ₹12.2 lakh crore for FY27.
- Fiscal deficit target: 4.3% of GDP.
- Debt-to-GDP target: 50% by 2031.
- Total Budgeted Expenditure: ₹53.5 lakh crore.
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