India's macro aspirations: Fiscal discipline will continue with thrust on reducing debt

Finance Minister Nirmala Sitharaman reaffirmed the central government's strategy to reduce the fiscal deficit to 4.5% of GDP by FY26 through fiscal consolidation. Following a pandemic-induced debt surge to 89% of GDP in FY21, it has now decreased to 81%. Starting from 2026-27, the focus will shift to reducing the debt-to-GDP ratio annually. Finance Secretary TV Somanathan highlighted the importance of managing public debt. Madan Sabnavis from Bank of Baroda emphasized state compliance with FRBM norms, while NR Bhanumurthy suggested a clear roadmap by the 16th Finance Commission. Collaboration with the Reserve Bank of India and addressing fiscal challenges as outlined by economists remain essential.