Question

What fiscal deficit target (as % of GDP) was set in the Union Budget 2026–27 presented on 1 February 2026? ____.

• A. 3.5%
• B. 4.0%
• C. 4.3%
• D. 4.8%

Hint:

To trace the consolidation path, recall the sequential decline: the fiscal deficit target moved downward from 4.4% (Revised Estimate 2025–26) directly to 4.3% (Budget Estimate 2026–27).

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
The fiscal deficit represents the excess of total government expenditure over its total non-borrowed receipts, serving as a primary indicator of macroeconomic stability and public debt accumulation.

Step 2: Detailed Explanation:
In the Union Budget presented on February 1, 2026, the central government set the Fiscal Deficit target at 4.3% of GDP for the financial year 2026–27. This projection continues a path of gradual consolidation, reducing the deficit step-by-step from the Revised Estimate (RE) of 4.4% recorded during the 2025–26 fiscal year. The calculation balances a total estimated expenditure of ₹53.47 lakh crore against projected non-debt receipts of ₹36.51 lakh crore, with the remaining gap managed through planned market borrowings.

Step 3: Final Answer:
The fiscal deficit target established for 2026–27 is 4.3% of GDP.