Which one among the following is the estimated fiscal deficit as a percentage of GDP of India in the Budget Estimates of 2025-26?

Correct — B, 4.4 percent. The Union Budget 2025-26 puts the fiscal deficit for that year at 4.4 per cent of gross domestic product in the Budget Estimates, amounting to about ₹15.69 lakh crore of borrowing against total expenditure of ₹50.65 lakh crore and receipts other than borrowings of ₹34.96 lakh crore. The figure of 4.8 per cent in option (a) is the Revised Estimate for the preceding year, 2024-25, quoted in the very same speech one paragraph earlier. Both numbers therefore appear side by side in the Budget, and the question is asking which of them belongs to the Budget Estimates of 2025-26.

• (a)4.8 percent — 4.8 per cent is the Revised Estimate for 2024-25, not the Budget Estimate for 2025-26. It is printed a paragraph above the right answer in the Budget speech, which is exactly why it is the trap.
• (c)5.0 percent — 5.0 per cent overstates the deficit and matches no recent Budget figure; the trajectory has been downward from 5.6 per cent in 2023-24 actuals.
• (d)5.6 percent — 5.6 per cent is the actual outturn for 2023-24, two steps back on the consolidation path.

The fiscal deficit is the gap between total expenditure and total receipts other than borrowings, and it measures how much the government must borrow in a year. Since the pandemic the Union government has followed a stated consolidation path, bringing the deficit down from 9.2 per cent of gross domestic product in 2020-21 through 5.6 per cent in 2023-24 and 4.8 per cent in the revised estimates for 2024-25 to 4.4 per cent budgeted for 2025-26. The Budget 2025-26 also restated the objective in a new form, keeping the deficit at a level that puts central government debt on a declining path as a share of the economy.

Deficit questions are decided by knowing which of three numbers is being asked for: the actual for the year before last, the revised estimate for the current year, and the budget estimate for the coming year. All three appear within a few lines of one another in every Budget speech, so an item like this is really testing whether you read the label. Attaching the year to the number as you memorise — 4.8 for 2024-25 revised, 4.4 for 2025-26 budgeted — is the whole discipline. It also helps to remember the direction of travel, since a consolidation path means the newer number should be the smaller one.

• The Budget Estimate of the fiscal deficit for 2025-26 is 4.4 per cent of gross domestic product.
• The Revised Estimate for 2024-25 was 4.8 per cent, and the actual for 2023-24 was 5.6 per cent.
• In rupee terms the 2025-26 fiscal deficit is about ₹15.69 lakh crore.
• Total expenditure for 2025-26 is estimated at ₹50.65 lakh crore and receipts other than borrowings at ₹34.96 lakh crore.
• Net market borrowings from dated securities for 2025-26 are estimated at ₹11.54 lakh crore.

• Quoting the revised estimate of the previous year as the budget estimate of the coming one.
• Confusing the fiscal deficit with the revenue deficit or the primary deficit.
• Assuming a rising rupee deficit means a rising deficit ratio when the economy is also growing.

Asked as a single-figure recall item where the strongest distractor is the adjacent year's revised estimate from the same Budget speech.

• practice — not a real PYQ

  The fiscal deficit is defined as the excess of total expenditure over

  • (a)revenue receipts alone
  • (b)total receipts excluding borrowings
  • (c)tax revenue alone
  • (d)total receipts including borrowings

  Answer(b) total receipts excluding borrowings — which is why the fiscal deficit equals the year's borrowing requirement.

• practice — not a real PYQ

  The Revised Estimate of India's fiscal deficit for 2024-25 was

  • (a)4.4 per cent of GDP
  • (b)4.8 per cent of GDP
  • (c)5.6 per cent of GDP
  • (d)6.4 per cent of GDP

  Answer(b) 4.8 per cent of GDP — one step above the 4.4 per cent budgeted for 2025-26.