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“The upcoming Budget is expected to take a steady and disciplined approach. We see the FY27 fiscal deficit at around 4.3% of GDP, with the government remaining committed to its medium-term 50±1% debt-to-GDP target. Gross market borrowing is likely to stay elevated at roughly Rs 16 trillion, reflecting heavy redemptions and a continued focus on capex. We do not expect any major, economy-wide stimulus at this stage. The Government has already delivered two significant measures in FY26 — personal income-tax slab revisions and GST rate cuts. With committed revenue expenditure accounting for nearly 70% of the government’s revenue receipts and tax buoyancy only moderate, fiscal space for fresh giveaways is limited.

Some targeted support is expected for export sectors hit by the recent 50% US tariffs, particularly labour-intensive segments such as textiles, leather and gems & jewellery. Beyond this, sector-specific measures are likely to remain modest, with ongoing capex and manufacturing schemes providing indirect support to electronics and engineering-led exports.”