Archive · 31 Dec 2025
FY27 Budget to Focus on Reforms, GDP Update
The Indian government is planning big changes in the FY27 Union Budget.
They want to make it easier for businesses by removing some rules and changing some laws that are currently considered crimes.
Another important change is that the way they calculate the country's GDP will be updated to use a new base year, 2022-23.
This update will happen on 7 February.
While the actual numbers in the budget won't change, the ratios like how much debt the country has compared to its GDP might look different after this update.
These changes are meant to help the economy grow and make things simpler for businesses.
Additionally, the government's fiscal deficit for FY26 has widened due to lower tax collections, partly because of GST cuts.
The government is still expected to meet its fiscal deficit targets for FY26, supported by higher dividends from the RBI and public sector units.
FY27 Union Budget to focus on deregulating industries and decriminalizing laws.
New GDP series with base year 2022-23 to be introduced on 7 February.
Macro ratios like debt-to-GDP and tax-to-GDP may change post-budget due to the new GDP series.
Absolute budget figures will remain unaffected by the GDP series update.
Government's fiscal deficit for FY26 widened to 62.3% of the full-year target due to lower tax collections and GST cuts.
- Who
- The Indian government
- What
- Planned reforms in the FY27 Union Budget and fiscal deficit updates for FY26
- When
- FY27, with GDP series update on 7 February and fiscal data as of November 2025
- Where
- India
- Why
- To deregulate industries, decriminalize laws, update economic statistics, and address fiscal challenges
- Budget Year
- FY27
- Key Reforms
- Deregulation of industries, decriminalization of laws, incentivizing states, skilling youth, tax policy certainty
- GDP Series Update
- New base year 2022-23
- GDP Update Date
- 7 February
- Impact on Ratios
- Debt-to-GDP and tax-to-GDP ratios may change
- Fiscal Deficit Target
- ₹15.69 lakh crore (4.4% of GDP) for FY26
- Fiscal Deficit as of November 2025
- 62.3% of the full-year target
- Tax Revenue Collection (April-November 2025)
- ₹13.9 trillion (49% of the full-year estimate)
- Non-Tax Revenue Collection (April-November 2025)
- ₹5.16 trillion (88.6% of the full-year estimate)
Sources
More reforms lined up in FY27 Budget to deregulate industries, decriminalise laws
January 2026 financial changes: How 8th Pay Commission, new credit card, income tax and PF rules affect you
India's fiscal deficit hits ₹9.76 trillion, nearly two-thirds of target
‘Escalating geopolitics, climate change pose risk to growth prospect’
