India Hits FY26 Fiscal Deficit Target, FM Sitharaman Eyes 50% Debt-To-GDP By 2030

Union Finance Minister Nirmala Sitharaman said on Sunday that the central government has met its fiscal deficit target for 2025-26, addressing concerns over borrowing and debt levels.

India's fiscal deficit stood at 4.4% of gross domestic product for the year ended March 31, 2026, ANI reported, amounting to Rs 15.19 lakh crore, or 97.5% of the revised estimates presented in February.

"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," Sitharaman said while speaking to the Indian diaspora in Chicago during an ongoing US visit.

She further added that the target had been met without cutting funding for social welfare schemes or public capital expenditure on infrastructure.

She said the government now aims to bring the debt-to-GDP ratio down to 50% by 2030, contrasting India's position with several advanced economies where debt levels exceed 200% of GDP.

"The trust that the world has of the fiscal prudence of Prime Minister Modi, shall not be compromised. As a result, credit ratings are improving," she said.

Sitharaman pointed to India sustaining growth of 7% or more since the Covid-19 pandemic despite global headwinds, including the Russia-Ukraine war, tariff disputes and disruptions in the Strait of Hormuz.

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She said fertiliser shortages had been avoided domestically because the government kept markets informed of its requirements, crediting the department for "smartly arranging fertiliser from various different routes."

International urea prices rose tenfold from Rs 300 to Rs 3,000 per bag after the pandemic, she said, with the government absorbing the increase through a subsidy of Rs 2,700 per bag.

She added that New Delhi had also stepped in with budgetary support to cover elevated insurance premiums for shipping liners after global insurers withdrew coverage for vessels transiting volatile corridors.

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On trade policy, Sitharaman said India was pursuing bilateral pacts with partners such as the European Union, Australia, the UAE and EFTA nations given the slow pace of multilateral frameworks. "The multilateral treaty age has gone off," she said.

The minister is on a nine-day visit to Canada and the US from August 25 to September 2, and is scheduled to attend G20 finance track meetings in Asheville, North Carolina, following bilateral talks held earlier in Canada.

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