Debt-to-GDP Ratio:
The Union Government has announced a shift from fiscal deficit to debt-to-GDP ratio as the primary fiscal anchor from FY 2026-27, targeting a 50±1% ratio by 2031. Debt-to-GDP Ratio represents the proportion of a country’s total debt to its GDP, indicating economic stability and repayment capacity.A higher ratio signals increased risk of default and financial instability. A lower ratio indicates better fiscal health and investor confidence. Debt sustainability depends on growth rates, fiscal deficit trends, and interest payments.
