Fiscal roadmap: Govt on track for 4.4% deficit in FY26, DEA Secretary cites strong growth support

Economic Affairs Secretary Anuradha Thakur on Saturday said the government remains on track to achieve its fiscal deficit target of 4.4 per cent of GDP for 2025-26, despite concerns triggered by the latest monthly numbers.The statement came as the Centre’s fiscal deficit touched 29.9 per cent of the full-year target by end-July, sharply higher than 17.2 per cent of the Budget Estimates in the same period last year. The Budget had pegged the fiscal deficit for FY26 at Rs 15.69 lakh crore, or 4.4 per cent of GDP.“So this question (of achieving the target) has been coming up because of the latest numbers. I would like to say that quarter-by-quarter or month-by-month assessments of fiscal deficit numbers may not give a correct picture because of temporal mismatches, which may come in on the receipt and expenditure side.

On the overall fiscal deficit numbers, our assessment so far is that we will be able to achieve the target,” Thakur told PTI in an interview.She underlined that the fundamentals of the economy remain strong. “Even private consumption numbers which came out yesterday are showing positive movement. The gross capital formation numbers also showed that both public and private capex are strong and there is anticipation these should be steadfast in the coming quarters as well,” she said.

Thakur said government capital expenditure has been a major factor in sustaining growth. “Government capex has been a big factor in holding up our numbers so far and not only on the fiscal deficit side but the growth numbers also remains robust as of now,” she added.Commenting on India’s 7.8 per cent GDP growth in Q1 FY26 — the fastest in five quarters — she said it reflected the broad-based resilience of the economy. “Q1 numbers reflect the basic resilience of our economy.

It reflects strengthening of the momentum in the economy and it is anchored in strong macroeconomic fundamentals,” she said.She pointed out that manufacturing, construction, services and agriculture, along with robust domestic demand, had all contributed to the strong performance. Thakur expressed confidence that the momentum would continue in the coming quarters.India’s April-June GDP growth of 7.8 per cent was driven by a strong showing in agriculture and services like trade, hotels, financial and real estate. This pace, the strongest since January-March 2024 when growth hit 8.4 per cent, keeps India ahead of China, which posted 5.2 per cent in the same period.