Finance Minister Nirmala Sitharaman will present her record 9th straight Budget, and all eyes will be on the much-awaited customs reforms.
Sitharaman had, in her first Budget in 2019, replaced the leather briefcase — which had been in use for decades for carrying Budget documents — with a traditional ‘bahi-khata’ wrapped in red cloth. This year’s budget will be in paperless form, as done in the last four years.
Here are the key numbers to watch out for in the Union Budget for 2025-26:
* Fiscal Deficit: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal (April 2025 to March 2026 or FY26), is estimated at 4.4 per cent of GDP.
Having achieved a fiscal consolidation roadmap with a deficit below 4.5 per cent of GDP in FY26, markets will keenly watch for direction on debt-to-GDP reduction in the FY27 Budget, as well as whether the government will provide a specific fiscal deficit number for the next financial year. There is an expectation that the government could announce a fiscal deficit of 4 per cent of the GDP for FY27.
* Capital Expenditure: The government’s planned capital expenditure for this fiscal year is budgeted at ₹11.2 lakh crore. The government is likely to maintain its focus on capital expenditure in the upcoming Budget, with a 10-15 per cent increase in the capex target from the current level, as private sector players remain cautious.
The government would have space for capex, and it should be in excess of ₹12 lakh crore, as the pay revision will be announced in FY28, leaving little room for others.
* Debt Roadmap: The finance minister, in her 2024-25 budget speech, had stated that from 2026-27 onwards, fiscal policy would endeavour to maintain the fiscal deficit in a way that the central government debt is on a declining path as a percentage of GDP.
Markets will closely look for the debt consolidation roadmap from FY27 onwards to see when the finance minister sees general government debt-to-GDP fall to the 60 per cent target. The general government debt-to-GDP ratio was 85 per cent in 2024, which included central government debt of 57 per cent.
* Borrowing: The government’s gross borrowing Budget was ₹14.80 lakh crore in FY26. The government borrows from the market to fund its fiscal deficit. The borrowing number will be watched by the market as it gives a sense of the fiscal health of the country, and also about revenue and non-revenue collection.
* Tax Revenue: The 2025-26 Budget had pegged gross tax revenue at ₹42.70 lakh crore, an 11 per cent growth over FY25. This includes ₹25.20 lakh crore estimated to come from direct taxes (personal income tax + corporate tax), and ₹17.5 lakh crore from indirect taxes (customs + excise duty + GST).
* GST: Goods and Services Tax (GST) collection in 2025-26 is estimated to rise 11 per cent to ₹11.78 lakh crore. FY27 GST revenue projections will be closely watched, as the revenue growth is expected to gain momentum with the government’s implementation of rate reductions since September 2025.
* Nominal GDP: India’s nominal GDP growth (real GDP plus inflation) in FY26 was estimated to be 10.1 per cent, while the real GDP growth estimated by NSO is 7.4 per cent. However, nominal GDP has been revised downward to 8 per cent due to inflation falling below the estimation during the Budget.
FY27 nominal GDP growth projections in the Budget will give an idea about the inflation trajectory in the next fiscal. As per the various estimates, the government may announce a nominal GDP between 10.5 and 11 per cent for FY27.
*Spotlight would also be on spending on key schemes like G RAM G, as well as key sectors like health and education.
Published on January 31, 2026
