Govt to Maintain 4.4% Fiscal Deficit in FY26, Expenditure Cuts Expected

• Central government aims to stick to its 4.4% fiscal deficit target for FY26 despite revenue shortfalls.
• Economists predict a need to manage or cut expenditure due to lower-than-budgeted tax revenue and divestment receipts.
• Nominal GDP growth for FY26 is estimated at 8%, lower than the 10.1% assumed in the Budget, though absolute GDP is slightly higher.
• Net tax revenue in April-November was 3.4% lower than last year, and divestment receipts are significantly below estimates.
• Experts like DK Pant (India Ratings) and Dhiraj Nim (ANZ Bank) foresee expenditure cuts, including capex, to meet the target.

Why It Matters: India will meet its FY26 fiscal deficit target of 4.4% by managing expenditure amid revenue shortfalls.