The government will aim to reduce fiscal deficit to 4.5% of Gross Domestic Product (GDP) in Financial Year 2026 (FY26), down from an estimated 4.8% in FY25, according to a Union Bank of India report. "We expect absolute fiscal deficit to increase from RE of ₹15.7 lakh crore to ₹16.2 lakh crore in FY26," the report stated.