Remain committed to 4.3% fisc deficit aim for FY27, fin min tells Lok Sabha
This story was originally published at 14:56 IST on 27 July 2026
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NEW DELHI – The government remains committed to the budgeted fiscal deficit target of 4.3% of GDP for 2026-27 (Apr-Mar), Minister of State for Finance Pankaj Chaudhary said Monday. "However, the government continues to closely monitor evolving global developments and their implications for the Indian economy, and take appropriate policy measures, as warranted, to safeguard macroeconomic stability," Chaudhary said in a written response to a question in the Lok Sabha.
This comes a day after Finance Minister Nirmala Sitharaman's comment that there is no need for the government to rethink its Budget numbers as of now despite the price pressures from geopolitical uncertainties, as the government already accounted for increased spending in different funds such as the Economic Stabilisation Fund. "Budget numbers I don't think I need to reconsider as of now, because there's been enough such funds created to meet all these challenges that are happening," the finance minister had said.
The government's finances have been under pressure so far this year, with some economists expecting the Centre to miss its fiscal deficit target for FY27. For Apr-May, the government's fiscal deficit was over 12 times the year-ago figure. The sharp rise in the fiscal gap was due to 18% growth in total expenditure and a 2% drop in revenue. The Union Budget pegged the fiscal deficit for FY27 at 4.3% of GDP, or INR 16.96 trillion. The fiscal deficit target for FY27 will, however, be 4.5% of GDP, based on the downward revision in India's nominal GDP in the new series with FY23 as the base year.
The Economic Stabilisation Fund was set up earlier in 2026 with a INR 1-trillion corpus to meet expenditure needs arising from uncertain geopolitical conditions. "The availability of fiscal buffers, including the Economic Stabilisation Fund, provides additional flexibility to respond to external shocks while maintaining the fiscal consolidation path," Chaudhary told the Lok Sabha in a separate response. End
Reported by Priyasmita Dutta
Edited by Avishek Dutta
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