3 days ago
Sitharaman Says India Meets FY26 Deficit Target, Sets Debt Goal
India’s government says it kept its borrowing on the path it had planned for the 2025-26 financial year.
The country spent more money than it collected, creating a fiscal deficit equal to 4.4% of its economy.
This deficit was about ₹15.19 trillion.
Finance Minister Nirmala Sitharaman said the government reached its target without cutting welfare programs or infrastructure projects.
She said India wants its debt compared with the size of its economy to fall to 50% by 2030.
The government also planned fertilizer purchases and used subsidies to help farmers during a global price increase.
It helped shipping companies pay higher insurance costs so important imports could continue.
Sitharaman said India is making trade deals with individual partners because wider global trade talks have slowed.
India’s fiscal deficit reached 4.4% of GDP, or ₹15.19 trillion, in the year ended March 31, 2026.
Finance Minister Nirmala Sitharaman said the figure met the government’s fiscal consolidation trajectory for 2025-26.
The government aims to reduce its debt-to-GDP ratio to 50% by 2030.
Sitharaman said fiscal discipline was maintained without reducing social welfare or public infrastructure spending.
She cited fertilizer planning, subsidies and shipping-insurance support, while emphasizing bilateral trade agreements amid slower multilateral negotiations.
- Who
- Union Finance Minister Nirmala Sitharaman and the Government of India.
- What
- India met its 2025-26 fiscal consolidation target, recording a fiscal deficit of 4.4% of GDP and setting a 50% debt-to-GDP goal for 2030.
- Where
- Sitharaman spoke to the Indian diaspora in Chicago, United States.
- When
- The financial year ended March 31, 2026; Sitharaman made the remarks on August 30, 2026, during a visit running from August 25 to September 2.
- Why
- She was outlining India’s fiscal management, debt strategy, response to global supply disruptions and trade policy.
Key facts
- Fiscal deficit
- 4.4% of GDP for the year ended March 31, 2026.
- Deficit amount
- Approximately ₹15.19 trillion, or ₹15.19 lakh crore.
- Revised estimate
- The deficit equaled 97.5% of the government’s revised estimate presented in the Union Budget.
- Debt objective
- Reduce the debt-to-GDP ratio to 50% by 2030.
- Fertilizer support
- Sitharaman said urea prices rose from about ₹300 to nearly ₹3,000 per bag after the pandemic, with the government providing about ₹2,700 per bag in subsidies.
- Shipping support
- Budgetary funds were used to offset higher insurance premiums for shipping liners facing geopolitical risks.
- Trade strategy
- India is pursuing bilateral trade and investment agreements with partners including the European Union, Australia, the United Arab Emirates and European Free Trade Association countries.
Quotes
Nirmala Sitharaman
India’s Union Finance Minister
“The trust that the world has of the fiscal prudence of Prime Minister Modi- he was so when he was Chief Minister of Gujarat, he is so now, even when he is the Prime Minister of the country, the fiscal prudence shall not be compromised. As a result, credit ratings are improving”
thehindubusinessline.com
“We have given ourselves a fiscal discipline path on the fiscal deficit as well. We have fulfilled the trajectory. The last mile that had to be reached by 2025-26, we have reached.”
livemint.com
thehindubusinessline.com
Sources
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