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Debt-GDP ratio may dip to 55.1%, fiscal deficit to 4.2%
Financial Express Bengaluru
|January 16, 2026
POLICY SHIFT
THE CENTRE'S DEBT-TO-GDP ratio in 2026-27 may be reduced by one percentage point to nearly 55.1%, signalling a structural shift in India's fiscal policy framework.
A one-percentage-point reduction in the debt ratio would translate into a fiscal deficit of around 4.2% of GDP in FY27, compared with the budgeted 4.4% in FY26.
The debt ratio, rather than the fiscal deficit alone, is emerging as the primary anchor of medium-term fiscal management, with the deficit continuing to serve as an operational tool to achieve the broader objective of sustainable public debt.
This story is from the January 16, 2026 edition of Financial Express Bengaluru.
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