The government is expected to prioritise medium-term debt consolidation while continuing a strong push for capital expenditure in the Union Budget for 2026-27, according to pre-Budget expectations outlined by rating agency ICRA.ICRA said the upcoming Budget assumes added significance as it will be the first to align with the recommendations of the 16th Finance Commission, which will decide fiscal transfers between the Centre and the states for the next five years. The agency expects the Centre’s fiscal deficit to be capped at around 4.3 per cent of GDP in 2026-27, slightly lower than the 4.4 per cent budgeted for 2025-26, supported by an estimated 9.8 per cent growth in nominal GDP.On this trajectory, the Centre’s debt-to-GDP…
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