Union Budget 2025-26: Key Terms & Statistics

1. Key Fiscal Indicators:

Fiscal Deficit (FD)

• • • • Definition: “Fiscal Deficit (FD) is the difference between total expenditure and total receipts (excluding Debt Capital Receipts). FD is reflective of the total borrowing requirement of the Government.”

• • • • What are the current statistics?

The FD, reflecting the total borrowing requirement of the government, is estimated at ₹15,68,936 crore (4.4% of GDP) for BE 2025-26. This is a slight decrease from the Revised Estimate (RE) of ₹15,69,527 crore (4.8% of GDP) for 2024-25.

Revenue Deficit (RD) 

• • • • Definition: “Revenue Deficit refers to the excess of revenue expenditure over revenue receipts.”

• • • • What are the current statistics? 

The RD, which is the excess of revenue expenditure over revenue receipts, is projected at ₹5,23,846 crore (1.5% of GDP) for BE 2025-26, down from ₹6,10,098 crore (1.9% of GDP) in RE 2024-25.

Effective Revenue Deficit (ERD)

• • • • Definition: “Effective Revenue Deficit is the difference between Revenue Deficit and Grants-in-Aid for Creation of Capital Assets.”

• • • • What are the current statistics? 

The ERD, calculated by subtracting grants-in-aid for creation of capital assets from the revenue deficit, is significantly reduced to ₹96,654 crore (0.3% of GDP) in BE 2025-26, a substantial decrease from ₹3,10,207 crore (1.0% of GDP) in RE 2024-25.

Primary Deficit (PD): 

• • • • Definition: “Primary Deficit is measured as Fiscal Deficit less interest payments.”

• • • • What are the current statistics? 

The PD, which is the fiscal deficit less interest payments, is estimated at ₹2,92,598 crore (0.8% of GDP) in BE 2025-26. This is a reduction from ₹4,31,587 crore (1.3% of GDP) in RE 2024-25.

• • • • GDP Growth: The nominal GDP for FY 2025-26 is estimated at ₹2,923 lakh crore, reflecting a 10.1% growth over the Revised Estimates for FY 2024-25.

2. Revenue Sources:

• • • Total Receipts: The total receipts are projected at ₹50,65,345 crore for BE 2025-26, up from ₹47,16,487 crore in RE 2024-25.

    • Tax Revenue: The net tax revenue is estimated at ₹28,37,409 crore for BE 2025-26. This comprises:

      • • Corporation tax: ₹10,82,000 crore

        • Taxes on income (including Securities Transaction Tax): ₹14,38,000 crore

        • Goods & Services Tax: ₹11,78,000 crore

        • Customs: ₹2,40,000 crore

        • Union Excise Duties: ₹3,17,000 crore

    • Non-Tax Revenue: Non-tax revenue is projected at ₹5,83,000 crore for BE 2025-26. This includes interest receipts (₹47,738 crore), dividends and profits (₹3,25,000 crore), and other non-tax revenue sources.

    • Capital Receipts: Capital receipts are estimated at ₹16,44,936 crore for BE 2025-26, including recovery of loans (₹29,000 crore) and other receipts (₹47,000 crore). The major chunk here is debt receipts

    • Borrowings & Other Liabilities: These constitute a significant portion of the receipts, estimated at ₹15,68,936 crore in BE 2025-26, indicating continued reliance on borrowings to finance the budget.

3. Expenditure Patterns:

• • • Total Expenditure: Total expenditure is projected at ₹50,65,345 crore for BE 2025-26, matching the total receipts.

    • Revenue Expenditure: Revenue expenditure is estimated at ₹39,44,255 crore, which includes interest payments (₹12,76,338 crore) and grants-in-aid for the creation of capital assets (₹4,27,192 crore).

    • Capital Expenditure: Capital expenditure is pegged at ₹11,21,090 crore for BE 2025-26.

    • Effective Capital Expenditure: When combined with Grants-in-Aid for creation of capital assets, the Effective Capital Expenditure (Eff-Capex) stands at ₹15,48,282 crore for BE 2025-26.

    • Definition: “Effective Capital Expenditure (Eff-Capex) refers to the sum of Capital Expenditure and Grants-in-Aid for Creation of Capital Assets.”

    • Major Expenditure Items: Significant allocations are made for:

      • Central Sector Schemes: ₹16,21,899 crore

      • Interest Payments: ₹12,76,338 crore

      • Transfers to States: ₹5,08,000 crore

      • Centrally Sponsored Schemes: ₹5,41,850 crore

      • Defence: ₹4,91,732 crore

      • Major Subsidies: ₹3,83,407 crore (includes fertilizer, food, and petroleum subsidies)

      • Pensions: ₹2,76,618 crore

4. Deficit Financing:

• • • The fiscal deficit is primarily financed through debt receipts, particularly market borrowings (G-Sec), which are estimated at ₹11,53,834 crore for BE 2025-26.

    • Other financing sources include securities against small savings (₹3,43,382 crore), State Provident Funds (₹5,000 crore), other internal debts and public accounts (₹40,746 crore), external debt (₹23,490 crore), and drawdown of cash balance (₹2,484 crore).

    • Short Term Borrowing via T-Bill is estimated at 0 for BE 2025-26

5. Resource Transfers to States and Union Territories:

• • • The total transfers to States and UTs are estimated at ₹25,59,764 crore for BE 2025-26.

    • This includes devolution of states’ share in taxes (₹14,22,444 crore), transfers under centrally sponsored schemes (₹5,14,442 crore revenue), finance commission grants (₹1,32,767 crore) and other grants/loans/transfers.

    • The transfers also include Special Assistance as Loan to States for Capital Expenditure (₹1,50,000 cr).

6. Major Scheme Outlays:

The budget allocates significant funds to various Centrally Sponsored Schemes. Some noteworthy examples include:

• • • • Mahatma Gandhi National Rural Employment Guarantee Programme (MGNREGP): ₹86,000 crore

      • Jal Jeevan Mission (JJM): ₹67,000 crore

      • Pradhan Mantri Kisan Samman Nidhi (PM-Kisan): ₹63,500 crore

      • National Health Mission : ₹30,010 crore

      • Pradhan Mantri Awas Yojana (PMAY) – Urban & Rural: ₹19,794 crore, ₹54,832 crore respectively.

      • Samagra Shiksha: ₹41,250 crore

      • PM POSHAN: ₹12,500 crore

      • National Highways Authority of India: ₹170,266 crore

      • Railways – New Lines: ₹32,235 crore

      • The Production-Linked Incentive (PLI) scheme for various sectors like automobiles, textiles and pharmaceuticals have also seen significant allocations.

7. Trends and Observations:

• • • Fiscal Prudence: The budget exhibits a focus on reducing fiscal deficits and primary deficits. The projected decrease in the revenue deficit and effective revenue deficit suggests a move towards better fiscal management.

    • Emphasis on Capital Expenditure: The increased effective capital expenditure signals a thrust towards investments in infrastructure, which can foster long-term economic growth.

    • Definition: “Progressively, effective capex (as % of GDP) has increased over the years while expenditure on revenue account (as % of GDP) has come down, indicating improved quality of expenditure.”

    • Tax Revenue Growth: The net tax revenue is expected to see a healthy growth of approx 11% from RE 2024-25 to BE 2025-26.

    • Continued Reliance on Borrowings: Despite efforts to improve fiscal health, the government continues to rely on borrowing to fund a significant portion of the budget.

    • Shift in Scheme Focus: Some programmes like the PM SHRI schools see large jumps in allocations, while other programmes like Jal Jeevan Mission see significant reductions in budget estimates.

8. Key Documents & Resources:

• • • The official Ministry of Finance website provides access to key budget documents, including the Finance Minister’s speech, budget highlights, annual financial statements, and various annexures.

    • The budget data is available in both PDF and Excel formats. The official site notes that PDF files should be considered final in case of discrepancies between formats.

Conclusion: