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RAS question

What was the fiscal deficit target as a percentage of GDP set in the Union Budget 2025-26?

Correct answer: (B) 4.4%.

The Union Budget 2025-26 estimated India’s fiscal deficit at 4.4 per cent of GDP.

  1. (A)

    3.5%

  2. (B)

    4.4%

  3. (C)

    4.9%

  4. (D)

    5.1%

Explanation

The answer is 4.4 per cent because the Union Budget 2025-26 Budget Estimates put the fiscal deficit at 4.4 per cent of GDP. PIB’s Budget highlights place this figure alongside total receipts other than borrowings of Rs 34.96 lakh crore, total expenditure of Rs 50.65 lakh crore, and net tax receipts of Rs 28.37 lakh crore, making it part of the formal Budget arithmetic rather than a policy slogan. This continues fiscal consolidation: the revised estimate for FY2024-25 was 4.8 per cent, and the FY2025-26 estimate moves the deficit below the medium-term 4.5 per cent mark.

Why the other options are wrong

  • (A) 3.5 per cent is below the Budget 2025-26 estimate and is not the fiscal deficit figure stated in PIB Budget highlights.
  • (C) 4.9 per cent does not match the FY2025-26 Budget Estimate; it belongs to the previous year’s revised-estimate context, not the new target.
  • (D) 5.1 per cent refers to an earlier fiscal-deficit target and is higher than the 4.4 per cent estimate set for FY2025-26.

Concept

This tests fiscal policy under the Union Budget, especially the fiscal deficit as a percentage of GDP. RAS repeatedly asks such figures because they connect macroeconomic stability, government borrowing and current Budget priorities.

Source

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