According to the revised estimate, the size of the Budget for the current fiscal is Rs 49.64 lakh crore, lower from Rs 50.65 lakh crore estimated in February 2025. The Budget for fiscal 2024-25 was at Rs 46.52 lakh crore.
Total expenditure is pegged at Rs 53.47 lakh crore in the next fiscal, much more than tax receipts, the finance minister said in reply to a discussion on the Union Budget in the Lok Sabha.
The government aims for tax receipts of Rs 44.04 lakh crore, 8 per cent higher than the previous year.
Talking about capex, she said, the government has made the highest-ever allocation of Rs 12.2 lakh crore, which is 3.1 per cent of GDP and 11.5 per cent higher than the Revised Estimates (RE) for 2025–26.
On the recommendation of state finance ministers, she said, capital expenditure loans for 50 years are increased to Rs 2 lakh crore for Special Assistance to States for Capital Investment (SASCI).
With this, she said, the effective capital expenditure rises to Rs 17.1 lakh crore, which is 4.4 per cent of the GDP.Besides, she said, the government is following the fiscal discipline and has projected the fiscal deficit at 4.3 per cent of the GDP or Rs 16.95 lakh crore for FY27.
To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.7 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 17.2 lakh crore.
She further said that the focus on the reduction of the debt-to-GDP ratio is part of the Fiscal Responsibility and Budget Management (FRBM).
To strive towards accepted standards of fiscal management, in Budget 2025-26, she had indicated that the central government would target reaching a debt-to-GDP ratio of 50±1 per cent by 2030-31.
In line with this, the debt-to-GDP ratio is estimated to be 55.6 per cent of GDP in BE 2026-27, compared to 56.1 per cent of GDP in RE 2025-26.
A declining debt-to-GDP ratio will gradually free up resources for priority sector expenditure by reducing the outgo on interest payments.
Speaking on other major announcements made in the Budget, she said, through the PM Gati Shakti filters, states can aspire to be selected for one of the five regional medical hubs, which we plan to set up.
States can propose and seek approval for these hubs, where medical education and patient treatment can be developed together in one integrated area, she said.
Nursing and 10 different allied health services will have dedicated institutions within these hubs, through which people can learn, get skilled and find jobs, she said, adding, over time, these hubs can also become medical tourism centres.
Debunking claims of a shortage of fertilisers in the country, she said, there is enough for farmers, and the government has made a budgetary allocation of Rs 1.71 lakh crore for its import to support farmers.
On Centre’s fund transfer to states, Sitharaman said, 16th Finance Commission analysed the state’s share transferred by the Centre from 2018-19 to 2022-23, and concluded that in each of these years, the devolution made by the Centre exactly matches the recommendation of the Finance Commission.
“So, we are not the only ones claiming this. The Finance Commission itself, after studying this in detail, has stated in its report that the money which has to go from the Centre to the states, taking the years 2018–19 to 2022–23 as examples and examining them, has clearly said that whatever amount has to go from the central government to the state governments has been given,” she said.
There is no scope for any doubt in this for the states, she added.
In the coming FY 2026-27, she said, the states’ share is estimated at Rs 25.44 lakh crore, which will be devolved to them – an increase of Rs 2.7 lakh crore from last year’s.
She also pointed out that the cess and surcharge collected by the Centre are given to the states for development work in various sectors.
This is separate from the 41 per cent of funds allocated to the states as per the recommendation of the Finance Commission.
Sitharaman also gave a point-by-point rebuttal to Leader of Opposition Rahul Gandhi’s claims that India has buckled under US pressure while signing the interim trade agreement with Washington.
Echoing sentiments of Union Minister Kiren Rijiju, the Finance Minister said, “Koi mai ka laal paida nahi hua jo humare desh ko bech de ya kharid le (no one has the audacity to sell or buy out India).”
She said that in fact it was the Congress-led UPA government which surrendered before the World Trade Orgasnisation and sold the poor and the farmers. In her response, she also targeted the TMC government in West Bengal, saying it’s bombs that prevail, not the law in the state.
Ruing the poor law and order situation in the state, she said West Bengal Chief Minister Mamata Banerjee, instead of improving it, is asking women to stay indoors at night.
West Bengal goes to elections in the next two months.