New Delhi, Feb. 1 -- The Union Budget 2026-27 marks a fundamental shift in India's fiscal framework. Starting next fiscal, the government has adopted the debt-to-GDP (gross domestic product) ratio as its main fiscal anchor, marking a strategic departure from the traditional focus on fiscal deficit.

While this new framework gives the government room to increase spending during economic shocks, it intensifies the focus on revenue performance and the government's ability in meeting its debt obligation sustainably.

In the latest Budget presented today by Finance Minister Nirmala Sitharaman, the government has set its fiscal deficit at 4.3% of GDP for 2026-27, down from 4.4% of GDP in 2025-26 (revised estimate) and 4.8% in 2024-25. The lates...