India’s government plans a modest improvement in its fiscal picture in the coming financial year, with reductions in the fiscal deficit and debt, while boosting manufacturing in sectors ranging from textiles to chips.
Finance Minister Nirmala Sitharaman, in her ninth consecutive budget speech, said on Sunday that the government sees its fiscal deficit falling to 4.3% of GDP in the 2026-27 financial year, down from 4.4% in 2025-26.
Sitharaman said the government expects India’s debt-to-GDP ratio to fall to 55.6% in the coming financial year from 56.1% in 2025-26.
The government plans to encourage manufacturing in seven key sectors, including semiconductors, rare-earth magnets, pharmaceuticals, chemicals, capital goods, textiles and sports goods.
India’s benchmark Nifty 50 stock index was down about 1.7% shortly after Sitharaman’s speech to parliament.
In its economic survey for the financial year 2026 released on Thursday, India said it sees its economy growing between 6.8% to 7.2% in the fiscal year 2027, outpacing most other major economies.
— This is a developing story. Check back here for updates.