Budget for world's fastest-growing major economy: Key numbers to be watched

Finance Minister Nirmala Sitharaman will present her record 8th straight Budget and all eyes will be on the much-expected tax relief for the middle class.

Sitharaman had in her first Budget in 2019 replaced the leather briefcase -- which was in use for decades for carrying Budget documents -- with a traditional 'bahi-khata' wrapped in red cloth.

This year's Budget would be in paperless form, as done in the last three years. Here are the key numbers to watch out for in the Union Budget for 2025-26:

Fiscal Deficit: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal (April 2024 to March 2025 or FY25) is estimated at 4.9 per cent of the GDP. As per the fiscal consolidation roadmap, the deficit is to be brought down to 4.5 per cent of GDP in FY26. Markets will keenly watch for the deficit number in the FY26 Budget.

Capital Expenditure: The government's planned capital expenditure for this fiscal year is budgeted at Rs 11.1 lakh crore. However, slower government spending in the first four months due to Lok Sabha elections delayed the capex cycle and the final numbers for the current fiscal are expected to be lower than budgeted. The capex momentum is expected to continue in the FY26 Budget as well.

Debt Roadmap: The finance minister, in her 2024-25 budget speech, had stated that from 2026-27 onwards the endeavour of fiscal policy would be to maintain the fiscal deficit in a way that the central government debt is on a declining path as a percentage of the GDP. Markets would closely look for the debt consolidation roadmap from FY27 onwards to see when the finance minister sees general government debt-to-GDP fall to the 60 per cent target. The general government debt-to-GDP ratio was 85 per cent in 2024, which included central government debt of 57 per cent.

Borrowing: The government's gross borrowing Budget was Rs 14.01 lakh crore in FY25. The government borrows from the market to fund its fiscal deficit. The borrowing number will be watched by the market, especially on the back of lower dividends from the RBI in FY26 compared to Rs 2.11 lakh crore in FY25.

Tax Revenue: The 2024-25 Budget had pegged gross tax revenue at Rs 38.40 lakh crore, an 11.72 per cent growth over FY24. This includes Rs 22.07 lakh crore estimated to come from direct taxes (personal income tax + corporate tax), and Rs 16.33 lakh crore from indirect taxes (customs + excise duty + GST).

GST: Goods and Services Tax (GST) collection in 2024-25 is estimated to rise 11 per cent to Rs 10.62 lakh crore. FY '26 GST revenue projections will be watched as the revenue growth has slowed over the last three months in the current fiscal.

Nominal GDP: India's nominal GDP growth (real GDP plus inflation) in FY25 is estimated to be 10.5 per cent, while the Real GDP growth estimated by NSO is 6.4 per cent. FY26 nominal GDP growth projections in the Budget will give an idea about the inflation trajectory in the next fiscal.

Dividend: The government estimated Rs 2.33 lakh crore from the RBI and financial institutions and Rs 56,260 crore from CPSEs as dividends in FY25. These two key non-tax revenue numbers will be looked for in FY26 Budget projections.

Disinvestment & Asset Monetisation: 'Miscellaneous Capital Receipts' -- which include proceeds from disinvestment and asset monetisation -- was pegged at Rs 50,000 crore in FY25 Budget. The FY26 Budget will give a number for next year and a broader asset monetisation roadmap.

The spotlight would also be on spending on key schemes like NREGA as well as key sectors like health and education.