Union Budget 2026: India's Debt-To-GDP Ratio Projected at 55.6% for FY27
During Union Budget 2026, the Finance Minister projected India's debt-to-GDP ratio at 55.6% for FY27, representing an improvement from the estimated 56.1% for FY26. This 0.5 percentage point decline demonstrates the government's fiscal consolidation efforts and commitment to sustainable debt management practices.
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The Finance Minister announced during the Union Budget 2026 presentation that India's debt-to-GDP ratio is projected to reach 55.6% in FY27, showing an improvement from the estimated 56.1% for FY26. This fiscal metric represents a significant indicator of the country's debt management and overall economic health, with the latest projection indicating a positive trajectory in India's fiscal position.
Debt Trajectory Analysis
The updated projections reveal a declining trend in India's debt-to-GDP ratio, with the government targeting a reduction of 0.5 percentage points from FY26 to FY27. This improvement reflects the government's commitment to fiscal consolidation and sustainable debt management practices.
| Parameter: | FY26 (Estimated) | FY27 (Projected) | Change |
|---|---|---|---|
| Debt-to-GDP Ratio: | 56.1% | 55.6% | -0.5% |
| Announcement Platform: | Union Budget 2026 | Union Budget 2026 | - |
Budget Context
The announcement was made as part of the comprehensive Union Budget 2026 presentation, where the Finance Minister outlined various fiscal parameters and economic projections. The debt-to-GDP ratio serves as a crucial benchmark for assessing the government's fiscal discipline and borrowing capacity, with the improved trajectory signaling strengthened fiscal management.
Economic Implications
This projection provides stakeholders with visibility into the government's debt reduction strategy and fiscal consolidation efforts. The declining debt-to-GDP ratio from 56.1% in FY26 to 55.6% in FY27 demonstrates the government's focus on maintaining sustainable debt levels while supporting economic growth. The improvement offers insight into India's enhanced fiscal management approach and commitment to long-term economic stability.
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