Revised GDP series raises FY27 fiscal deficit ratio to 4.46% and debt-to-GDP to 57.5%

Key facts

• The new GDP series (FY23 base) pegs FY26 nominal GDP at ₹345.47 lakh crore, 3.3% lower than the budget estimate based on the old series.
• With a 10% nominal growth assumed for FY27, the targeted fiscal deficit of ₹16.96 lakh crore equals 4.46% of GDP against the budgeted 4.31%.
• The FY26 fiscal deficit target becomes 4.51% of GDP instead of 4.36% unless the absolute deficit is cut.
• The FY24 and FY25 fiscal deficit ratios are revised upwards to 5.7% and almost 4.95% of GDP from 5.5% and 4.8% respectively.
• The debt-to-GDP ratio for FY27 is now estimated at 57.5%, 1.9 percentage points higher than the budgeted 55.6%.
• ICRA chief economist Aditi Nayar stated the consolidation path to FY31 is relatively steeper under the new series.
• India Ratings chief economist DK Pant said fiscal consolidation and nominal growth rates must be stronger than previously assumed to meet targets.