Kamal Ghorui
The Union Budget for FY 2026-27 has pegged total expenditure at Rs 53.47 lakh crore, Finance Minister Nirmala Sitharaman said while replying to the discussion on the Budget in the Lok Sabha, outlining the government’s strategy of maintaining high capital spending alongside fiscal consolidation.The revised estimate for the current financial year ending March 31 has been placed at Rs 49.64 lakh crore, lower than the Rs 50.65 lakh crore projected in February 2025, PTI reported. The Budget size for FY 2024-25 stood at Rs 46.52 lakh crore.The government has projected tax receipts of Rs 44.04 lakh crore for FY27, an increase of about 8% over the previous year, even as overall expenditure continues to remain significantly higher to support growth priorities.
Record capex push and state investment support
Highlighting the government’s infrastructure-led growth strategy, Sitharaman said capital expenditure allocation has been raised to a record Rs 12.2 lakh crore.This accounts for 3.1% of GDP and is 11.5% higher than the revised estimates for FY 2025-26, she said.On the recommendation of state finance ministers, the Centre has increased 50-year interest-free capital expenditure loans under the Special Assistance to States for Capital Investment (SASCI) scheme to Rs 2 lakh crore.With this, effective capital expenditure is estimated to reach Rs 17.1 lakh crore, or about 4.4% of GDP, the minister added.
Fiscal deficit and borrowing roadmap
The government has projected fiscal deficit at 4.3% of GDP, or Rs 16.95 lakh crore, for FY27, reaffirming its fiscal consolidation path.To finance the deficit, net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. The remaining financing will come from small savings and other sources, while gross market borrowings are estimated at Rs 17.2 lakh crore.Sitharaman said the government continues to focus on reducing the debt-to-GDP ratio in line with the Fiscal Responsibility and Budget Management (FRBM) framework.She recalled that the government had indicated in Budget 2025-26 that it aims to bring the debt-to-GDP ratio to 50±1% by FY 2030-31.In line with that roadmap, the debt-to-GDP ratio is estimated at 55.6% in Budget Estimates for FY27, compared with 56.1% in the revised estimates for FY26.A declining debt ratio will gradually free resources for priority sector spending by reducing interest outgo, she said.
Health infrastructure and medical hub push
The finance minister said states can compete to be selected for one of five proposed regional medical hubs through PM Gati Shakti filters.States can propose integrated hubs where medical education and patient treatment infrastructure will be developed together, she said.Dedicated institutions for nursing and 10 allied health services will be set up within these hubs to support skill creation and employment. Over time, these hubs could evolve into medical tourism centres, she added.
Fertiliser availability and farm support
Addressing concerns over fertiliser availability, Sitharaman said there is sufficient stock to support farmers.The government has allocated Rs 1.71 lakh crore towards fertiliser imports to ensure continued supply and price stability, she said.
Centre-state fiscal transfers
On fund transfers to states, Sitharaman cited findings of the 16th Finance Commission, which analysed devolution between 2018-19 and 2022-23.“So, we are not the only ones claiming this. The Finance Commission itself, after studying this in detail, has stated in its report that the money which has to go from the Centre to the states, taking the years 2018–19 to 2022–23 as examples and examining them, has clearly said that whatever amount has to go from the central government to the state governments has been given,” she said.“There is no scope for any doubt in this for the states,” she added.For FY27, the states’ share in central taxes is estimated at Rs 25.44 lakh crore, an increase of Rs 2.7 lakh crore over the previous year.She also said cess and surcharge collections are used for development works across sectors and are separate from the 41% tax devolution recommended by the Finance Commission.
Trade deal politics and opposition response
The finance minister also responded to criticism from Leader of Opposition Rahul Gandhi regarding India’s interim trade agreement with the US.Echoing remarks made by Union Minister Kiren Rijiju, Sitharaman said, “Koi mai ka laal paida nahi hua jo humare desh ko bech de ya kharid le (no one has the audacity to sell or buy out India).”She further alleged that the Congress-led UPA government had compromised India’s position at the World Trade Organization and also criticised governance and law-and-order conditions in West Bengal.West Bengal is scheduled to go to elections in the next two months.
