In her first budget of 2019, Sitharaman had replaced the leather suitcase – which had been in use for decades to carry budget documents – with a traditional ‘bahi-khata’ wrapped in red cloth. This year’s budget will be in paperless form, as has been the case for the last four years.
Here are the key figures to look out for in the Union Budget 2025-2026:
* Fiscal Deficit: The budgeted fiscal deficit, which is the difference between government expenditure and revenue, for the current fiscal year (April 2025 to March 2026 or FY26) is estimated at 4.4 percent of GDP.
With a fiscal consolidation roadmap in place with a deficit below 4.5 percent of GDP in FY26, markets will be keenly watching for direction on debt-to-GDP reduction in the FY27 budget, as well as whether the government will provide a specific fiscal deficit figure for the next financial year. The government is expected to announce a fiscal deficit of 4 percent of GDP for FY27.
* Capital Expenditure: The government’s planned capital expenditure for this fiscal year has been budgeted at ₹11.2 lakh crore. The government is likely to continue its focus on capital expenditure in the upcoming budget, with the capex target increasing by 10 to 15 percent from current levels, as private sector players remain cautious.
The government would have room for capital investments, and these should be over ₹12 lakh crore as the wage revision will be announced in FY28, leaving little room for others.
* Debt Roadmap: The Finance Minister had stated in her 2024-25 Budget speech that fiscal policy from 2026-27 onwards would aim to maintain the fiscal deficit in a manner that public debt as a percentage of GDP is on a downward path.
Markets will be closely watching the debt consolidation roadmap from FY27 onwards to see when the finance minister sees the government debt-to-GDP ratio falling to the 60 percent target. Government debt as a percentage of GDP was 85 percent in 2024, including central government debt of 57 percent.
* Borrowing: The government’s gross borrowing budget stood at ₹14.80 lakh crore in FY26. The government borrows from the market to finance its budget deficit. The borrowing figure will be watched by the market as it gives a sense of the fiscal health of the country, as well as revenue and non-revenue figures.
* Tax revenue: In the Budget for 2025-26, gross tax revenue was pegged at ₹42.70 lakh crore, a growth of 11 per cent over FY25. This includes an estimated ₹25.20 lakh crore from direct taxes (personal tax + corporate tax), and ₹17.5 lakh crore from indirect taxes (customs + excise + GST).
* GST: Goods and Services Tax (GST) collection in 2025-26 is estimated to rise 11 per cent to ₹11.78 lakh crore. GST revenue forecasts for FY 2027 will be closely watched as revenue growth is expected to gain momentum as the government implements rate cuts since September 2025.
* Nominal GDP: India’s nominal GDP growth (real GDP plus inflation) in FY26 was estimated at 10.1 percent, while NSO’s estimated real GDP growth is 7.4 percent. However, nominal GDP has been revised downwards to 8 percent as inflation fell below estimates during the budget period.
The nominal GDP growth projections in the FY27 budget will provide an idea of the inflation trajectory in the next fiscal year. According to the various estimates, the government could announce a nominal GDP between 10.5 and 11 percent for FY27.
*Focus would also be on spending on key programs such as G RAM G, as well as key sectors such as health and education.
Published on January 31, 2026
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