New Delhi: Union Budget 2026–27 kept a “long term vision at the forefront” by increasing capital expenditure and improving the expenditure mix, a report said on Monday.
The report from Crisil Intelligence said the focus is shifting to the long term—with reforms, improving ease of doing business, and inclusive growth getting centre stage.
Immediately after the Covid-19 pandemic, the primary focus was on ramping up infrastructure spending and mitigating pandemic impact on growth and welfare, the report reminded.
“But as the domestic economy strengthened and stabilised, the need for direct short-term support to growth has reduced,” it said, adding that the budget thus moved its focus to long-term growth.
The government sought to build resilience by focusing on developing the manufacturing and services sectors further, thus setting the stage for the next leg of growth.
The progress on fiscal consolidation and moving to a medium-term debt target also provides space to look beyond the short-term, the research firm highlighted.
India’s real GDP growth is set to surprise on the upside this fiscal at 7.4 per cent versus 6.5 per cent last fiscal, as fiscal support for consumption and tax reliefs supported private consumption, the report said.
The budget continues to extend consumption support though central welfare support to lower-income households continue with increased thrust on employment and asset generating schemes, even as subsidies are moderated.
The report highlighted an improving quality of spending, with the Centre’s capex share in GDP maintained at 3.1 per cent and grants to states lifting effective capex to about 4.4 per cent of GDP.
“The past few years have seen a clear reorientation of revenue expenditure towards capex. However, given the rising share of interest payments, further noticeable reductions in revenue expenditure could be limited,” the firm said.
Capital expenditure rose by 9 per cent to reach Rs 12.2 lakh crore in 2026-27, marking one of the largest such allocations in recent times and equating to 4.4 per cent of GDP.
Central government set a fiscal deficit target of 4.3 per cent of GDP for FY27 after a 4.4 per cent estimate for FY26, and nominal GDP growth was pegged at 10 per cent.
(IANS)
