Current Affairs · Union Budget 2026-27 Fiscal Objectives
With reference to the fiscal indicators and medium-term objectives presented in the assessment of the Union Budget 2026–27, which of the following best describes the targets for the Gross Fiscal Deficit and the national debt levels?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A targeted reduction of the Gross Fiscal Deficit to 4.3% of GDP for 2026–27, aligned with a medium-term objective to achieve a Debt-to-GDP ratio of 50±1% by the financial year 2030–31.✓
- 2A strategic increase in the Gross Fiscal Deficit to 4.8% of GDP to accommodate an expansion in revenue expenditure to 12% of GDP, while maintaining a long-term debt ceiling of 60%.
- 3An immediate reduction in the Debt-to-GDP ratio to 45% by 2027 through a Gross Fiscal Deficit cap of 3.9% of GDP and a deliberate contraction in capital expenditure to 2.0% of GDP.
- 4A projected growth in Gross Tax Revenue of 12% to facilitate a Gross Fiscal Deficit of 4.4% of GDP while simultaneously removing the medium-term Debt-to-GDP targeting framework.
Correct answer
A targeted reduction of the Gross Fiscal Deficit to 4.3% of GDP for 2026–27, aligned with a medium-term objective to achieve a Debt-to-GDP ratio of 50±1% by the financial year 2030–31.
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