Key Points from the Finance Ministry’s Statement (6 August)

1. Global Economic Disruption:

* The Ministry stated that the world is facing “trade policy dislocation”, especially amid escalating conflicts across the Middle East.
* These challenges were highlighted in the Medium-Term Expenditure Framework (MTEF) 2025, tied to the FY26 Budget.

2. Fiscal Responsibility & Planning:

* The statement fulfills Section 3 of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003.
* It outlines revenue and expenditure projections for 2024–25, and indicative projections for FY26 and FY27.

3. Uncertainty & Policy Response:

* Ongoing global uncertainty, geopolitical tensions, and inflation are impacting India’s policy decisions.
* It underlined the importance of multi-year projections for sound policymaking.

4. Fiscal Consolidation:

* Since FY 2020–21, India has pursued a consolidation path while remaining flexible.
* Targets:

* Reduce fiscal deficit to below 4.5% of GDP by FY26.
* FY26 Budget will extend projections to FY 2026–27 to FY 2030–31.

5. GDP Outlook:

* Nominal GDP for FY26 projected at ₹501 lakh crore (based on the last year of the 15th Finance Commission).
* Economic strategy focuses on supporting growth while ensuring fiscal discipline.