New Delhi is witnessing a strategic pivot in fiscal planning as the Union Budget for 2026-27 emphasizes long-term vision over immediate relief measures. According to a detailed analysis by Crisil Intelligence released on Monday, the government has ramped up capital expenditure and refined spending mechanisms to foster sustainable development.
The report highlights a clear departure from short-term stimulus, focusing instead on structural reforms, ease of doing business, and inclusive growth models. Post-COVID, the priority was infrastructure push and economic recovery, but with stability restored, the budget now eyes future-proofing the economy.
Manufacturing and services sectors receive bolstered support to lay the groundwork for the next growth phase. Fiscal consolidation has freed up resources, enabling this forward-looking approach. India’s real GDP growth is projected at 7.4% for the current fiscal year, up from 6.5% last year, driven by consumption-boosting policies and tax reliefs that spurred household spending.
While consumption support continues, welfare schemes for low-income families prioritize employment and asset-building over subsidies. Capital expenditure quality has improved markedly, with the Centre’s capex steady at 3.1% of GDP, and total effective capex including state aid reaching 4.4%.
Over recent years, revenue spending has been redirected towards capex, though rising interest payments pose challenges. The budget allocates a record Rs 12.2 lakh crore for capex, a 9% hike, underscoring commitment to infrastructure. Fiscal deficit targets are tightening to 4.3% of GDP for FY27 from 4.4%, with nominal GDP growth estimated at 10%.