The Union Budget 2026-27 has been lauded for its long-term vision, focusing on increasing capital expenditure and enhancing the expenditure mix. According to a report by Crisil Intelligence, the budget aims at reforms, improving ease of doing business, and fostering inclusive growth. Initially addressing the Covid-19 impact, the budget has now shifted its focus to long-term growth strategies, emphasizing the development of manufacturing and services sectors for sustained progress.
The government’s efforts to bolster resilience include a move towards medium-term debt targets and fiscal consolidation. This shift allows for a broader perspective beyond short-term goals, setting the stage for future economic growth. The report predicts a positive surprise in India’s real GDP growth for the fiscal year, projecting a 7.4% growth rate compared to the previous fiscal year’s 6.5%.
With a significant increase in capital expenditure by 9% to Rs 12.2 lakh crore for 2026-27, the budget allocates a substantial portion towards infrastructure development, amounting to 4.4% of GDP. The fiscal deficit target for FY27 stands at 4.3% of GDP, reflecting a strategic approach towards maintaining economic stability and growth.
The budget’s focus on enhancing the quality of spending, maintaining the Centre’s capex share in GDP at 3.1%, and augmenting grants to states for effective capex, indicates a shift towards sustainable and growth-oriented fiscal policies. The report also notes a positive trend in revenue expenditure reorientation towards capital expenditure, underscoring the government’s commitment to long-term economic development.
