Budget 2026 to Target Fiscal Deficit, Debt Goals for Viksit Bharat Vision

"The budget is part of the Viksit Bharat roadmap and the drafters will stick to the fiscal deficit. Also, the debt to GDP is the main indicator, so they will stick to that," Dev said on the sidelines of an event organised by the SKOCH Group on macroeconomic indicators.

He said India has made steady progress on fiscal consolidation since the pandemic with the fiscal deficit reducing from about 9% during the COVID period to around 4.8% this year.

The government is targeting a fiscal deficit of about 4.4% going forward. Central government debt-to-GDP is estimated at 56.1%, while combined central and state debt stands at about 80%, which could decline to 76% by 2030, he said.

Outlining what is required to achieve the Viksit Bharat goal, Dev said sustained high growth depends on higher investment and better efficiency. "If you want to achieve 7 to 8 per cent growth, you need around a 35 per cent investment rate," he said, adding that the current investment rate of about 30 per cent needs to improve.

He said improving the efficiency of investment is equally important. "The capital-output ratio has to be improved from the present 5 to about 3.5 to 4," Dev said, stressing that better utilisation of capital is necessary to sustain higher growth.

Dev also highlighted the importance of total factor productivity, which he said includes gains from technology and efficiency beyond capital and labour. "This will improve the efficiency," he said.

On global challenges, Dev said geopolitical tensions and tariff-related issues remain key uncertainties, prompting India to focus on self-reliance. "Now the geopolitical concerns are there, so India's response to this is Atmanirbharata," he said.

He said India aims to build competitive manufacturing capabilities while ensuring product quality. "We should produce competitive manufacturing and quality products, and others will invest in India," Dev said.

Dev said reforms undertaken over the past decade and in recent months are aimed at boosting efficiency and attracting private capital. He cited measures such as the goods and services tax, income tax reforms, labour codes, liberalisation of foreign direct investment in insurance, and opening the nuclear energy sector to private participation.

"All these things will increase the efficiency and we need to have more private capital and also increase FDI," he said.

He also stressed the role of states in achieving developed-country status. "It's a large country and states also have to participate," Dev said, adding that each state should have its own goals and implementation mechanisms.

On the growth outlook, Dev said India's economy remains resilient despite global headwinds. "This year the projection is 7.4 percent growth," he said, adding that growth next year is expected to be in the range of 6.5% to 7%.

He said India's average growth over the post-COVID years has been strong at about 7.7%, reflecting underlying domestic strength.

Dev acknowledged global headwinds from geopolitics, tariffs and weakening multilateral institutions, but said global growth remains supported by investment in artificial intelligence-led development. "From India's side, I think mostly there are tailwinds," he said, pointing to a strong domestic economy and rising private investment.

- ANI