A balance between conservative incremental fiscal consolidation and flexibility to support growth in an uncertain global environment
Download ReportQuantEco Research || FY26 Union Budget: Steady for now, Ready to Go
Union Budget focuses on maintaining near-and-medium term fiscal commitments - Fiscal deficit ratio target of 4.4% for FY26 retained; pivots to debt-targeting regime -to lower debt/GDP ratio from 56.1% to 55.6%. The fiscal arithmetic remains credible, albeit a tad conservative. Ample positive takeaways: (i) maintenance of capex thrust at elevated levels, (ii) easing of several tax compliance measures, (iii) sectoral push for MSMEs, Electronics, Data Centres, Rare Earth, Bio-Pharma, Textiles, Education, Medical Tourism, Logistics, etc
The fiscal strategy appears to be underpinned by “gradualism” with “Reform Express” paving the way for Viksit Bharat.
On the flip side, unanticipated hike in STT for F&O segment and Government’s high borrowing programme (vs market expectations) could lead to knee jerk reaction in the near term