The government is maintaining fiscal consolidation while prioritising capital expenditure to support infrastructure-led growth, according to the Finance Ministry's Monthly Economic Review for February 2026.
India's medium-term macro outlook remains constructive as the Union Budget for FY27 signals continuity in capital expenditure alongside a softer fiscal drag, according to a report by Goldman Sachs.
The Union Budget's continued focus on capital expenditure and manufacturing is a positive, but a slower pace of fiscal consolidation and higher market borrowings are disappointing, according to investment bank Nomura.
The Union Budget for FY27 has adopted a calibrated approach to fiscal consolidation while prioritising higher government spending and sector-specific incentives, according to a report by Jefferies.
The Finance Minister noted that the economy faces global uncertainties, disrupted supply chains and rising demands for energy and critical minerals, necessitating resilient and forward-looking policy measures. Some of the key announcements of the budget were the public capital expenditure
Senior Congress leader P. Chidambaram on Sunday raised concerns over the Union Budget 2026, questioning the government's approach on trade, investment, and defence expenditure.
With the Union Budget for FY27 scheduled for Sunday, expectations are tamed even as markets remain alert to the possibility of selective positive surprises, according to a pre-Budget note by Union Bank of India (UBI).
"Our deficit has only fallen with time, so there is consolidation. However, there is some degree of concern when it comes to the state deficits. There is a need to look at why some states are moving away from the Fiscal Responsibility and Budget Management (FRBM) or the kind of gains they ha
Buoyant revenue streams give the government room to keep capital expenditure spending steady, at about 3.1 per cent of GDP, while continuing on the path of fiscal consolidation, according to a pre-Budget report by ICICI Bank Global Markets.
The Finance Minister, in the upcoming Union Budget 2026, is likely to refrain from further fiscal consolidation in FY27, according to a report by Nuvama.
Dev said India has made steady progress on fiscal consolidation since the pandemic with the fiscal deficit reducing from about 9% during the COVID period to around 4.8% this year
Benign inflation in India, fiscal consolidation, and prudent macroeconomic policies have enhanced economic resilience, the RBI report noted on Wednesday.