The Centre has set its fiscal deficit at 4.3% of GDP for the financial year 2026-27. Finance Minister Nirmala Sitharaman said this in her Budget 2026-27 speech. The government also aims for a debt-to-GDP ratio of 55.6%. This marks a slight reduction from the revised estimate of 4.4% in 2025-26. Ms. Sitharaman said, "I have fulfilled my commitment made in FY 2021-22 to reduce the fiscal deficit below 4.5% of GDP by 2025-26." The debt-to-GDP ratio is expected to fall from 56.1% in 2025-26 to 55.6% in 2026-27. Ms. Sitharaman added, "A declining debt-to-GDP ratio will gradually free up resources for priority sector expenditure by reducing the outgo on interest payments." Experts note that fiscal consolidation is slowing. D.K. Srivastava from EY India said the drop in fiscal deficit is smaller this year, from 4.4% to 4.3%. He attributed this to a fall in the government’s gross tax revenue ratio, which dropped from 11.5% of GDP in 2025 to 11.2% in 2027. The Budget forecasts Centre’s net tax receipts at ₹28.7 lakh crore, a 7.2% rise over the previous year. Corporate tax revenue is projected at ₹12.3 lakh crore, up 11%, while income tax revenue is expected to grow 11.7% to ₹14.7 lakh crore. On spending, total expenditure is budgeted at ₹53.5 lakh crore, up 7.7%. Capital expenditure will grow 11.5% to ₹12.2 lakh crore. Ms. Sitharaman highlighted, "This amounts to 4.4% of GDP, the highest in at least the last 10 years."