- The focus of fiscal policy is shifting toward anchoring public finances in terms of debt-to-GDP ratio rather than just fiscal deficit targets. - Debt consolidation helps ensure long-term macroeconomic stability, sovereign ratings improvement, and creation of fiscal space for future shocks. - Balancing capital expenditure (capex) growth with debt sustainability remains a crucial challenge for budget making in India. - **Fiscal Responsibility and Budget Management (FRBM) Act:** Enacted in 2003, this legislation institutionalizes fiscal discipline by setting statutory targets for deficit reduction and public debt management to ensure long-term macroeconomic stability in India. - **Union Budget:** The annual financial statement of the Government of India outlining estimated receipts and expenditures, increasingly incorporating public debt targets for fiscal consolidation. **Introduction** The article discusses the strategic shift in India's fiscal policy framework towards anchoring budget management and fiscal consolidation around public debt targets rather than purely focusing on fiscal deficits, ensuring long-term economic resilience and stability. **Core Issue and Detailed Points** - The focus of fiscal policy is shifting toward anchoring public finances in terms of debt-to-GDP ratio rather than just fiscal deficit targets. - Debt consolidation helps ensure long-term macroeconomic stability, sovereign ratings improvement, and creation of fiscal space for future shocks. - Balancing capital expenditure (capex) growth with debt sustainability remains a crucial challenge for budget making in India. **Key Statutory Bodies, Acts & Concepts** - **Fiscal Responsibility and Budget Management (FRBM) Act:** Enacted in 2003, this legislation institutionalizes fiscal discipline by setting statutory targets for deficit reduction and public debt management to ensure long-term macroeconomic stability in India. - **Union Budget:** The annual financial statement of the Government of India outlining estimated receipts and expenditures, increasingly incorporating public debt targets for fiscal consolidation.