Budget ready reckoner: Mkt borrowings' share declines, Centre's capex up

The government has stuck to the target of reducing its fiscal deficit to below 4.5 per cent of gross domestic product (GDP) for FY26. New fiscal consolidation strategy will give importance to debt from FY27. However, debt and fiscal deficit are directly linked. Reduction in sovereign debt-to-GDP ratio requires a decline in fiscal deficit in proportion to GDP, too. Not binding the government to the ultimate aim of reducing fiscal deficit to three per cent of GDP will, however, give it a leeway to pursue counter-cyclical policies, particularly in a downturn.