THE CENTRE’S fiscal arithmetic is set to see a significant transition with the operational target for fiscal consolidation moving to debt-to-GDP ratio instead of fiscal deficit as Finance Minister Nirmala Sitharaman will present her ninth consecutive Budget on Sunday. The Centre has projected the debt-to-GDP ratio to decline to 50±1% by March 2031 from an estimated 56.1% in March 2026. “Globally, anchoring fiscal policy to the debt-to-GDP ratio provides governments with flexibility to respond to economic shocks, while maintaining long-term sustainability. The debt-to-GDP ratio will be contingent upon nominal GDP growth, which forms the basis of the ratio, along with the government’s borrowing and repayment obligations. Even this level of fiscal deficit implies high gross borrowings in view of the repayment trajectory for coming years, ICICI Bank Economic Research said in a note.

Source: Indian Express February 01, 2026 05:17 UTC