India met fiscal deficit target for FY26: Nirmala Sitharaman
What's the story
Finance Minister Nirmala Sitharaman has announced that the central government has successfully met its fiscal deficit targets for the financial year 2025-26. The country's fiscal deficit stood at 4.4% of GDP for the year ending March 31, 2026. Sitharaman made the announcement while addressing a gathering of Indian diaspora in Chicago and emphasized India's commitment to fiscal discipline and economic stability.
Debt reduction
Debt-to-GDP ratio to be reduced to 50% by 2030
Sitharaman also revealed the government's plan to reduce the debt-to-GDP ratio to 50% by 2030.
She contrasted India's position with that of several advanced economies where debt levels exceed 200% of GDP.
"The trust that the world has of the fiscal prudence of Prime Minister Modi-he was so when he was Chief Minister of Gujarat, he is so now, even when he is the Prime Minister of the country, the fiscal prudence shall not be compromised. As a result, credit ratings are improving," she said.
Economic resilience
Domestic growth above 7% since COVID-19
Sitharaman highlighted that India's domestic economic growth has remained above 7% since the COVID-19 pandemic.
This is despite global challenges such as the Russia-Ukraine war, tariff disputes, and supply disruptions in the Strait of Hormuz.
She also noted that fertilizer shortages were avoided due to proactive government measures to keep markets informed about requirements for different seasons.
Subsidy and support
Government's subsidy on urea prices
Sitharaman said that the government absorbed a 10-fold increase in global urea prices after COVID-19 by providing a subsidy of ₹2,700 per bag.
She also highlighted how the government stepped in with budgetary support when global insurers refused to cover vessels on volatile transit corridors.
This was done to ensure uninterrupted import flows despite rising risk premiums for shipping liners.
Trade strategy
Bilateral trade and investment treaties with partners
On India's foreign trade strategy, Sitharaman said the country is moving ahead with bilateral trade and investment treaties with partners like the EU, Australia, UAE, and EFTA nations.
This is due to the slow pace of multilateral trade frameworks.
"So trade agreements are continuing. On a bilateral basis, we are moving with trade treaties," she said.