India Halves Fiscal Deficit from Covid Peak, On Track for FY26 Target: Economic Survey

• India's fiscal deficit has more than halved from pandemic-era highs, indicating a return to fiscal discipline.
• The Union government is on track to reduce the deficit from 9.2% of GDP in FY21 to a targeted 4.4% in FY26.
• Fiscal deficit lowered to 4.8% of GDP in FY25, slightly better than the budgeted 4.9%.
• The Economic Survey advocates for a debt anchor (50±1% debt-to-GDP by March 31, 2031) over rigid 3% FRBM targets.
• While Centre's finances improved, state finances remain a concern with rising deficits and cash transfers.

Why It Matters: India has significantly reduced its fiscal deficit and is on course for its FY26 target, boosting economic stability.