Module: General Practice
Q157: According to the Union Budget 2026-27, what is the revised Fiscal Deficit target set for the financial year 2026-27, expressed as a percentage of GDP?
✅ Correct Answer: B
The Fiscal Deficit target for FY 2026-27 is set at 4.3% of GDP.
Fiscal Deficit is the gap between the government's total expenditure and its total revenue (excluding borrowings), indicating the total borrowing requirement of the government for that year.
The government has been following a fiscal consolidation path to bring the deficit below 4.5%. The Revised Estimate (RE) for the previous year (FY 2025-26) was 4.4%. The target of 4.3% for FY27 signals a continued commitment to fiscal discipline while maintaining high capital expenditure.
A lower deficit reduces the government's borrowing from the market, leaving more liquidity available for the private sector (preventing the "Crowding Out" effect).
Fiscal Deficit is the gap between the government's total expenditure and its total revenue (excluding borrowings), indicating the total borrowing requirement of the government for that year.
The government has been following a fiscal consolidation path to bring the deficit below 4.5%. The Revised Estimate (RE) for the previous year (FY 2025-26) was 4.4%. The target of 4.3% for FY27 signals a continued commitment to fiscal discipline while maintaining high capital expenditure.
A lower deficit reduces the government's borrowing from the market, leaving more liquidity available for the private sector (preventing the "Crowding Out" effect).