India’s Union Budget for 2025-26 has set the total government expenditure at Rs 50.65 lakh crore, reflecting an increase from Rs 47.16 lakh crore in the revised estimates for 2024-25. The fiscal deficit is projected at 4.4 percent of GDP, down from 4.8 percent in the revised estimates of the previous year, as the government aims for fiscal consolidation.
According to the Budget 2025 documents, the government’s gross tax revenue is estimated at Rs 42.70 lakh crore, while net tax receipts for the Centre are projected at Rs 28.37 lakh crore after accounting for the states’ share. Non-tax revenue is expected at Rs 5.83 lakh crore, while capital receipts, including borrowings, are projected at Rs 16.45 lakh crore.\
Also read: Our LIVE blog on Budget 2025
Among expenditures, capital expenditure has been set at Rs 11.21 lakh crore, reflecting the government’s focus on infrastructure and asset creation. Effective capital expenditure, which includes grants for capital asset creation, is estimated at Rs 15.48 lakh crore. The government has allocated Rs 12.76 lakh crore for interest payments, making it the largest component of expenditure.
Transfers to states, including their share of taxes, grants, and loans, are projected at Rs 25.01 lakh crore, showing a rise of Rs 4.91 lakh crore over the actuals for 2023-24.
The government’s fiscal strategy aims to balance growth and fiscal discipline, with revenue receipts projected at Rs 34.20 lakh crore, an increase from Rs 30.88 lakh crore in the previous year’s revised estimates. The revenue deficit is pegged at 1.5 percent of GDP, improving from 1.9 percent in 2024-25.
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