Rating agency expects fiscal deficit at 4.3% of GDP, robust direct tax growth, and higher market borrowings in FY27 as Centre balances prudence with infrastructure spending.
The Union government is likely to prioritise medium-term debt consolidation while maintaining a strong push for capital expenditure in the upcoming budget for 2026-27, according to pre-budget expectations outlined by rating agency ICRA.
The budget assumes special significance as it will be the first to align with the recommendations of the 16th Finance Commission, which will determine fiscal transfers between the Centre and states for the next five years.
ICRA estimates that the Centre’s fiscal deficit will be capped at around 4.3 per cent of GDP in 2026-27,…