New Delhi, Feb. 2 -- India's Union budget for FY27 marks a clear shift in the Centre's fiscal framework, with the government formally moving from a focus on annual fiscal deficit reduction to a debt-to-GDP regime of budget discipline that is designed to absorb external shocks without derailing medium-term consolidation.

The new approach comes after the Centre sharply reduced its fiscal deficit from pandemic-era highs, and at a time of rising global uncertainty driven by trade disruptions, geopolitical risks and volatile capital flows.

Finance minister Nirmala Sitharaman said in her budget speech on Sunday that the central government is estimating its debt at 55.6% of nominal GDP for the next financial year. The target, she added, is to ...