Describing a new budgetary consolidation roadmap, the Union 2025-26 budget said that the objective would be to maintain the budget deficit in such a way that central government debt is reduced to around 50% of GDP Here on March 31, 2031. The news. The roadmap was fixed during the period from financial year 27 at exercise 31.
“Without any macro-economic shock, exogenous disruptive and keeping the trends in potential growth and emerging development needs, the government would endeavor to maintain the budget deficit each year (from exercise 2026-27 until the Exercise 2030-31) so that the debt of the central government is on the decline in the way to reach a debt in the GDP of around 50 ± 1% by March 31, 2031 (the last year of the 16th cycle of the Finance Committee), ”said budgetary documents.
The debt of the central government, based on the definition of FRBM, is estimated at 57.1% of GDP in the revised estimates (re) 2024-25, including responsibilities due to investment in special securities of states, Under the NSSF, which is planned at 0.9% of GDP in RE 2024-25. The debt of the central government of these liabilities represents approximately 56.2% of GDP in 2024-25.
The center is also considered marginally better on its objective of budget deficit for the financial year 201.8% of GDP, against 4.9% in budgetary estimates. For financial year 26, the center set the budget deficit to 4.4% of GDP.
Presenting the Union 2025-26 budget in Parliament on Saturday, the Minister of Finance of the Union, Nirmala Sitharaman, said that the government’s effort would be to maintain the budget deficit each year so that the debt of the government central remains on a drop in the percentage of GDP. “The roadmap for the next six years has been detailed in the FRBM press release,” she said. The Minister had made this announcement for a new tax consolidation roadmap in the Union 2025-26 budget.
The budgetary document explains that the choice of the debt / GDP ratio, because the budgetary anchor is in accordance with current global thought. “It encourages shift from Rigid annual fiscal Targets Towards More Transparent and Operationally Flexible Fiscal Standards,” It Said, Adding that it is expected that debt-to-gdp Based fiscal consolidation Strategy Would Help Rebuilders and Provide Requisite Space for Growth-Enhant expenses.
The document describes variable scenarios to obtain a debt / GDP report from the central government lower than 50% with nominal GDP growth between 10%, 10.5% and 11%. “This approach would provide operational flexibility required to the government to respond to unforeseen developments,” he said, adding that at the same time, it should set up the central government on the lasting trajectory in a transparent manner.
