Budget FY26 retained its focus on fiscal consolidation while setting a fiscal deficit target of 4.4% of GDP as against a revised 4.84% in the ongoing financial year. A downward revision in FY25 was brought about by reduced total expenditure – held back by capital spending (at 3.14% of GDP over 3.4% BE estimates). In addition, the non-tax revenue numbers for FY25 were revised lower on corporation taxes (given weaker than anticipated corporate GVA/earnings), and non-tax revenues as well as non-debt capital receipts were also revised lower (latter being held back by weak recovery of loans).
