New Delhi, Jan. 31 -- India is poised to meet its medium-term target of a 4.5 per cent fiscal deficit to GDP by 2026, which it had set in 2021, according to Bank of America (BofA). The Ministry of Finance continues to strike a delicate balance between fostering economic growth and maintaining fiscal prudence. While economic expansion has remained a priority, the fiscal deficit has steadily declined from the pandemic-induced highs, progressively stabilising toward the 4.5 per cent target.

BofA highlighted that while the upcoming Union Budget may not unveil the next phase of fiscal targets, clarity is expected in 2026 after achieving the current goals. For FY25, the fiscal deficit is estimated at 4.9 per cent of GDP, aided by lower capital...