RAS question
What is the total capital expenditure announced in India's Union Budget 2026-27, and what is the fiscal deficit target as a percentage of GDP?
Correct answer: (C) ₹12.2 lakh crore capex, 4.3% fiscal deficit.
India's Union Budget 2026-27 announced capital expenditure of Rs 12.2 lakh crore and estimated the fiscal deficit at 4.3 percent of GDP.
Explanation
The Budget Speech places the capital expenditure figure in the infrastructure section: public capex had risen to Rs 11.2 lakh crore in BE 2025-26, and for FY2026-27 the Finance Minister proposed increasing it to Rs 12.2 lakh crore to continue that momentum. The same speech later links fiscal deficit to the government's debt-consolidation path. After noting that the RE 2025-26 fiscal deficit was estimated at 4.4 percent of GDP, it states that the BE 2026-27 fiscal deficit is estimated at 4.3 percent of GDP. The question therefore combines two separate but related Budget markers: the capex allocation and the fiscal-deficit target.
Why the other options are wrong
- (A) Rs 10 lakh crore understates the announced capex, and 4.0 percent is below the Budget Speech's 4.3 percent fiscal-deficit estimate for BE 2026-27.
- (B) Rs 15 lakh crore overstates the capex figure, while 4.5 percent does not match the BE 2026-27 fiscal-deficit estimate given in the Budget Speech.
- (D) Rs 11.5 lakh crore is not the announced FY2026-27 capex figure, and 3.9 percent is lower than the stated 4.3 percent fiscal-deficit estimate.
Concept
This tests Budget terminology in Indian Economy, especially capital expenditure and fiscal deficit as headline fiscal-policy indicators. RAS repeatedly uses such figures because they connect current Budget announcements with infrastructure spending and fiscal prudence.