India Meets FY26 Fiscal Consolidation Target, Says Sitharaman in US | Today’s news

India has met the fiscal consolidation trajectory set for 2025-26 and will work to reduce government borrowing to 50% of gross domestic product (GDP) by 2030, Union Finance Minister Nirmala Sitharaman said in the US on Sunday.

Speaking to members of the Indian diaspora in Chicago during her official visit to the US, Sitharaman said the government remained on its planned path of fiscal discipline, with the country’s fiscal deficit at 4.4% of GDP in 2025-26.

“We have taken the path of fiscal discipline even on fiscal deficit. We have fulfilled the trajectory. We have reached the last mile which was to be achieved by 2025-26,” she said.

She said the government has set a target to reduce borrowing to 50% of GDP by 2030. “We have set a certain target, which is to reduce borrowing to 50% of GDP by 2030. So I will work on that path.”

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It compared India’s debt position with that of some advanced economies. “There are advanced economies whose debt is already over 200% of their GDP,” she said.

Defending the government’s fiscal approach, Sitharaman said the improvement in India’s credit ratings was not the result of cuts in social security spending. “The world witnessed the fiscal prudence of Hon’ble Prime Minister Shri Narendra Modi when he was the Chief Minister of Gujarat and when he was the Prime Minister of the country. Our credit rating is improving,” she said.

“But that’s not cutting back. That’s not stopping the resources that have to go to social security. It’s through proper management of the economy,” she added.

She also called for greater participation from the Indian diaspora, including through capital, ideas and talent, as the government works towards its 2047 goal of making India a developed economy.

“2047 is the target year set for achieving Viksit Bharat. It is barely 20 years. So the speed and scale with which reforms are happening needs much more support,” she said.

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“Much more support from people who are talented and exposed. Much more support from people who can give us ideas to take this forward. And above all, support in terms of capital, which is so necessary for the country to fulfill all its ambitions,” she added.

About global disruptions

The finance minister also highlighted the government’s response to disruptions in global fertiliser, oil and LPG supplies, including higher transport insurance premiums caused by geopolitical risks.

“Fertilizer shortages have not been felt in India because we have managed to keep the markets informed of how much we will need,” she said, adding that global supplies have dwindled and problems with oil, LPG and fertilizers have increased.

“The ships that were going to procure these supplies were not able to secure adequate insurance cover. The risk premiums have gone up significantly,” Sitharaman said.

She said the government subsequently supported additional insurance premiums for marine vessels through the budget announcement.

“Through the budget announcement, we have made available a pool of funds so that any additional premiums paid by shippers due to associated risks are supported by the government. As a result, Indian farmers, Indian households and Indian logistics do not suffer,” she said.

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She said the government’s ability to monitor global uncertainties while assessing domestic requirements has helped India remain resilient. “By constantly monitoring global uncertainties and understanding India’s own requirements, we have managed to remain resilient.”

“Many countries have seen their calculations collapse amid these uncertainties. Fortunately, despite our restrictions, we have kept our citizens protected in this challenging environment,” she added.

Sitharaman is on a nine-day visit to Canada and the US from August 25 to September 2. He will meet investors and business leaders during the visit and is scheduled to represent India at the G20 meeting of finance ministers and central bank governors in Asheville, North Carolina on August 31 and September 1.