India's fiscal consolidation path appears firmly on track, with economists projecting continued adherence to deficit targets and steady progress on debt reduction. A comprehensive pre-Budget survey conducted by Moneycontrol reveals strong consensus among financial experts regarding the government's fiscal trajectory through FY27.

Fiscal Deficit Projections Show Steady Progress

The survey of 20 economists indicates robust confidence in India's fiscal discipline, with projections showing the fiscal deficit at a median of 4.2% of GDP in FY27. This figure represents an improvement from the government's FY26 target of 4.4%, demonstrating continued commitment to the fiscal glide path.

Economists surveyed expressed confidence that the government would meet its 4.4% deficit target for FY26, suggesting limited slippage despite pressures from tax rationalisation and a volatile global environment. The narrow range of forecasts for FY27, clustering between 4% and 4.4%, indicates strong consensus that the Centre will maintain fiscal discipline even amid external uncertainties.

Debt Consolidation Remains on Target

The survey reveals significant optimism regarding India's debt management strategy. The debt-to-GDP ratio is projected at a median of 55.2% in FY27, with estimates tightly clustered between 54.6% and 55.7%. This projection signals limited concern over fiscal slippage and demonstrates progress toward the government's medium-term debt stabilisation goal.

India has established a target of reducing its debt-to-GDP ratio to 50% by FY31, with the government expected to increasingly shift focus from headline deficit numbers to debt metrics. The relatively benign outlook reflects expectations of steady nominal GDP growth, moderate expenditure discipline, and continued reliance on market borrowing rather than off-budget financing.

Market Borrowing and Growth Dynamics

Gross market borrowing is expected to remain elevated at ₹16.5 lakh crore, representing an increase from the ₹14.82 lakh crore already raised for FY26, which itself was higher than the previous fiscal's ₹14.01 lakh crore. Despite this increase, economists appear comfortable that higher borrowing will be absorbed without materially worsening debt dynamics, particularly if growth assumptions hold.

The economic growth outlook provides a supportive foundation for these fiscal projections. Economists expect the economy to record nominal GDP growth of 10.1% this fiscal, creating favourable conditions for fiscal consolidation efforts. This growth trajectory is expected to aid in maintaining the debt-to-GDP ratio on its declining path while accommodating necessary government expenditure.

Outlook for Fiscal Policy

The survey results demonstrate broad confidence in India's fiscal management capabilities despite global uncertainties. The tight clustering of projections across key metrics suggests that economists view the government's fiscal targets as both realistic and achievable. The combination of disciplined spending, steady growth, and strategic borrowing appears to be creating conditions conducive to sustained fiscal consolidation without compromising economic development priorities.

The government has convened an all-party meeting on January 27 to discuss the legislative and other agendas ahead of the upcoming Budget Session of Parliament. Parliamentary Affairs Minister Kiren Rijiju will host the meeting at the main committee room of Parliament House annexe at 11 am.

Budget Session Timeline and Key Events

The Budget Session will commence on January 28 with President Droupadi Murmu's address to the joint sitting of Lok Sabha and Rajya Sabha. In a rare occurrence in parliamentary history, the Union Budget will be presented on February 1, which falls on a Sunday. This will mark Finance Minister Nirmala Sitharaman's ninth consecutive budget presentation.

Parliamentary Proceedings and Schedule

The Lok Sabha has provisionally allocated three days from February 2 to 4 for discussion on the Motion of Thanks on the President's Address. There will be no Zero Hour on January 28 and February 1, according to an internal circular.

Political Context and Campaigns

The Budget Session comes amid significant political activity, with the opposition Congress conducting a nationwide campaign against the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act. This new legislation replaces the UPA-era Mahatma Gandhi National Rural Employment Guarantee Act. The ruling BJP is simultaneously running a counter campaign to highlight the new legislation as reformist and necessary to address loopholes in the previous law.

Pending Legislative Agenda

Nine bills are currently pending before the Lok Sabha, awaiting parliamentary consideration. Key pending legislation includes:

• Viksit Bharat Shiksha Adhishthan Bill, 2025
• Securities Markets Code, 2025
• Constitution (One Hundred and Twenty-ninth Amendment) Bill, 2024

These bills are presently under scrutiny by Parliamentary Standing or Select Committees.

Global Economic Context

The Union Budget presentation will occur against the backdrop of global economic uncertainties, particularly with US President Donald Trump's tariffs having disrupted the international economic order. This context adds significance to the upcoming budget discussions and policy announcements.