NEW DELHI (Realist English). India’s government has outlined plans for a modest improvement in its fiscal position in the next financial year, projecting lower deficits and debt levels while stepping up support for domestic manufacturing across a range of strategic industries.
Presenting her ninth consecutive budget to parliament on Sunday, Finance Minister Nirmala Sitharaman said the government expects the fiscal deficit to narrow to 4.3 percent of gross domestic product in the 2026–27 financial year, compared with 4.4 percent in 2025–26.
Sitharaman also projected a slight decline in public debt, with the debt-to-GDP ratio forecast to fall to 55.6 percent in the coming year from 56.1 percent previously, reflecting the government’s continued focus on gradual fiscal consolidation.
Alongside tighter budget discipline, the government plans to accelerate manufacturing growth in seven priority sectors: semiconductors, rare-earth magnets, pharmaceuticals, chemicals, capital goods, textiles and sports equipment. Officials say the strategy is aimed at strengthening supply chains, boosting exports and reducing dependence on imports in high-value industries.
Financial markets reacted cautiously to the budget announcements. India’s benchmark Nifty 50 fell around 1.7 percent in early trading following Sitharaman’s speech.
In its economic survey for the 2026 financial year, released last week, the government forecast economic growth of between 6.8 percent and 7.2 percent in fiscal year 2027, a pace that would keep India among the fastest-growing major economies globally.
The budget underscores New Delhi’s effort to balance fiscal restraint with industrial policy, as it seeks to sustain high growth while maintaining macroeconomic stability.
