Fiscal deficit (GFD)
GFD = Gross Fiscal Deficit- How often
- Every yearUnion Budget on 1 February
- Next release
- Mon 1 FebIn 81 days · expected · 11:00 AM
Budget estimate for 2026-27.
Events on this chart
Source: Union Budget, released 1 Feb 2026 · Chart: Clarity UPSC
- Previous
- 4.4%2025-26
- Highest
- 9.2%2020-21
- Lowest
- 2.5%2007-08
27 readings since 2000-01.
Story
How much the central government borrows in a year, as a share of Gross Domestic Product (GDP).
What is happening now As of 2026-27
The Union Budget 2026-27 targets a fiscal deficit of ₹16,95,768 crore, 4.3% of Gross Domestic Product (GDP). In 2025-26 the deficit was 4.4% of GDP, as budgeted; the Controller General of Accounts (CGA) puts the provisional result at 4.40%. The Finance Minister told Parliament that this met the government's 2021-22 promise to bring the deficit below 4.5% of GDP by 2025-26. The Budget credits the fall from 6.7% in 2021-22 to revenue kept on the budgeted path and tighter control of spending.
2026-27 is the first year in which the deficit is set to bring debt down: to 55.6% of GDP, from 56.1% in 2025-26. To cover the deficit, the Centre plans to borrow a net ₹11.7 lakh crore through government bonds; the rest comes mainly from small savings. By the end of September 2026 the deficit had reached ₹7,14,413 crore, 42.1% of the year's target, against 36.5% at the same point a year earlier (CGA).
Why it matters
The fiscal deficit is the amount the Centre must borrow in a year. Each year's borrowing adds to the government's debt, and interest on that debt is paid from future taxes. Money spent on interest cannot be spent on roads, schools or health, so a smaller deficit leaves more room for them later.
The government borrows from the same pool of savings that banks lend to companies and households, so heavy government borrowing can push up interest rates on loans. A lower deficit also leaves room to spend more when a crisis strikes, as in the pandemic year 2020-21. Parliament, the Reserve Bank of India (RBI), lenders and investors follow the figure, and from 2026-27 the Budget sets it each year to keep debt falling.
What it is
The fiscal deficit is the gap between the Centre's total spending and its receipts other than borrowing. It is the amount the government must borrow in the year.
The Union Budget sets a target every year. The Controller General of Accounts reports progress every month.
From 2026-27 the main fiscal anchor, the goal the Budget is built around, is debt: central government debt is to fall to 50% of Gross Domestic Product (GDP), within one point either way, by 31 March 2031. The fiscal deficit is the yearly target used to get there.
Read this number
- The publisher
- The Ministry of Finance presents the Union Budget to Parliament every year, usually on 1 February, with targets for spending, receipts and borrowing.
- Target 2026-27
- 4.3% of GDP
- Debt anchor
- 50 ± 1% of GDP by 31 March 2031
- Monthly tracker
- Controller General of Accounts
- Release rule
- Union Budget on 1 February; provisional actuals from the CGA at the end of May
Terms on this page (6)
- BE
- Budget Estimate
- CGA
- Controller General of Accounts
- FRBM
- Fiscal Responsibility and Budget Management
- GDP
- Gross Domestic Product
- RBI
- Reserve Bank of India
- RE
- Revised Estimate
History
- 2003The Fiscal Responsibility and Budget Management (FRBM) Act sets deficit limits.
- 2018The FRBM Act is amended to add a debt target.
- 23 Jul 2024The Budget announces that from 2026-27 the deficit will be set each year to keep central government debt falling as a share of Gross Domestic Product (GDP).
- 1 Feb 2025The 2025-26 Budget sets the debt target: 50% of GDP, within one point either way, by 2030-31.
- 2026The 2026-27 Budget, the first year under the debt anchor, targets 4.3% of GDP.
Readings
| Period | Value | Status | Released |
|---|---|---|---|
| 2026-27 | 4.3% | Budget estimate | 1 Feb 2026 |
| 2025-26 | 4.4% | Provisional | 29 May 2026 |
| 2024-25 | 4.8%revised from 4.8% | Final | 1 Feb 2026 |
| 2023-24 | 5.5%revised from 5.6% | Final | 29 Jan 2026 |
| 2022-23 | 6.5% | Final | 13 Sep 2024 |
| 2021-22 | 6.7% | Final | 13 Sep 2024 |
| 2020-21 | 9.2% | Final | 13 Sep 2024 |
| 2019-20 | 4.6% | Final | 13 Sep 2024 |
| 2018-19 | 3.4% | Final | 13 Sep 2024 |
| 2017-18 | 3.5% | Final | 13 Sep 2024 |
| 2016-17 | 3.5% | Final | 13 Sep 2024 |
| 2015-16 | 3.9% | Final | 13 Sep 2024 |
For UPSC
Know the four deficits (fiscal, revenue, effective revenue, primary) and how each is worked out, the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, and the move from a deficit target to a debt anchor: 50 ± 1% of Gross Domestic Product (GDP) by 2030-31, with the fiscal deficit as the operational target.