BS EDIT: Budget 2025: A commitment to fiscal discipline

Fiscal deficit on track

• FY25: 4.8% of GDP, better than 4.9% estimate

• FY26: 4.4%, in line with fiscal roadmap

• Capex remains high despite election constraints

Long-term fiscal plan

• From FY27, deficit tied to debt-to-GDP ratio

• Target: 50% debt-to-GDP by 2031

• Balances fiscal flexibility & stability

Debt projections & growth

• 10% GDP growth → debt at 52% by 2031

• 11% growth & strict fiscal control → 47.5%

• Even at 50% target, debt remains high

Revisiting FRBM targets

• FRBM (2018) set 40% central govt debt target

• 3% fiscal deficit target missed due to pandemic

• General govt debt may still hit 70-75% by 2031

Rising debt burden

• State govt debt at 28% of GDP

• High debt limits development spending

• Interest payments in FY26: 3.5% of GDP

The need for fiscal discipline

• Post-pandemic, India must cut reliance on debt

• Lower debt = stability & growth-focused spending

• Sustained prudence is key for resilience