Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026-27 in Parliament on February 1. Economists anticipate a focus on defense, infrastructure, capex, power, and affordable housing growth, while ensuring a balance between social welfare and fiscal responsibility. The government aims to sustain growth momentum and fiscal consolidation amidst global uncertainties.
Experts highlight the need for the Budget to navigate challenges arising from geopolitical changes. The fiscal deficit has reduced from 9.2% to 4.4% for FY26E, showcasing the government’s commitment to fiscal discipline. Analysts predict the government will continue its path of fiscal prudence without significant deviations.
This budget marks the 15th under the PM Modi government and the second full Budget since the NDA’s re-election in 2024. Sitharaman, the first female finance minister, will present the Budget for the ninth consecutive time. Unlike the previous year, where the focus was on middle-class tax reliefs, this year’s budget is expected to selectively stimulate consumption.
The upcoming Budget is likely to prioritize capital expenditure, especially in strategically vital sectors due to geopolitical factors. Investors are keen on debt metrics, deficit outcomes, and borrowing plans aligned with strategic goals. The bond markets will closely watch the borrowing size for strategic insights.
The ‘Economic Survey 2025-26’ projects a growth rate of 6.8-7.2% for FY27, slightly lower than the current year but exceeding market expectations. Despite being a Sunday, Indian stock exchanges will conduct live trading sessions on the Budget day.
