Centre may rejig spending to meet FY27 fiscal deficit target (Representative image)
New Delhi: The Centre is considering reprioritising spending without breaching its budgeted fiscal deficit target, as supply chain disruptions caused by the West Asia war have altered expenditure requirements, officials said.
"The government will meet the 2026-27 fiscal deficit target," said a senior official, who did not wish to be identified.
The Centre has targeted a fiscal deficit of ₹16.96 lakh crore for 2026-27, which is 4.5% of the nominal gross domestic product, as per the new series data released after the budget was presented. The deficit ratio was earlier pegged at 4.3%, based on the old series data.
Also Read: India weighs austerity steps, sees no immediate risk to FY27 deficit goal, sources say
While the government will continue with its elevated levels of capital spending to support the economy amid external shocks, it is analysing revenue expenditure trends of various ministries to see if funds can be transferred from one scheme to another or one head to another, should the situation so warrant, said another official.
The budget for 2026-27, presented almost a month before the US-Israeli strikes on Iran began on February 28, projected total expenditure at ₹53.47 lakh crore for the current fiscal, compared with ₹49.65 lakh crore a year before. Revenue spending was pegged at ₹41.25 lakh crore and capital expenditure at ₹12.21 lakh crore.
"Reprioritisation of expenditure is a viable, pragmatic option in difficult times, as it allows the government the flexibility to meet exigencies without compromising on key schemes," said the official cited earlier.
Also Read: Part of state capex loan tied to fiscal discipline
The government may also introduce new spending rules, including strict quarterly expenditure caps, to ensure funds are spent according to revised priorities.
"The government will meet the 2026-27 fiscal deficit target," said a senior official, who did not wish to be identified.
The Centre has targeted a fiscal deficit of ₹16.96 lakh crore for 2026-27, which is 4.5% of the nominal gross domestic product, as per the new series data released after the budget was presented. The deficit ratio was earlier pegged at 4.3%, based on the old series data.
Also Read: India weighs austerity steps, sees no immediate risk to FY27 deficit goal, sources say
While the government will continue with its elevated levels of capital spending to support the economy amid external shocks, it is analysing revenue expenditure trends of various ministries to see if funds can be transferred from one scheme to another or one head to another, should the situation so warrant, said another official.
The budget for 2026-27, presented almost a month before the US-Israeli strikes on Iran began on February 28, projected total expenditure at ₹53.47 lakh crore for the current fiscal, compared with ₹49.65 lakh crore a year before. Revenue spending was pegged at ₹41.25 lakh crore and capital expenditure at ₹12.21 lakh crore.
"Reprioritisation of expenditure is a viable, pragmatic option in difficult times, as it allows the government the flexibility to meet exigencies without compromising on key schemes," said the official cited earlier.
Also Read: Part of state capex loan tied to fiscal discipline
The government may also introduce new spending rules, including strict quarterly expenditure caps, to ensure funds are spent according to revised priorities.
