New Delhi, Jan 31 (.) With the union Budget set to be presented in Parliament on Sunday, expectations are high that the government will strike a careful balance between sustaining economic growth, generating employment and maintaining fiscal discipline amid a challenging global environment.
Economists believed that the Finance Minister Nirmala Sitharaman is expected to build on recent reforms while addressing domestic priorities such as boosting consumption, supporting capital expenditure and strengthening the manufacturing and services sectors.
The Budget comes at a time when India remains one of the fastest-growing major economies, even as global growth moderates due to geopolitical uncertainties, tight financial conditions and slowing demand in key markets.
Ahead of the Budget, the ‘halwa ceremony’, which marks the final stage of the preparation process for the Budget 2026-27, was held on January 27 in the Budget Press at North Block.
The Economic Survey 2026 was also tabled in Parliament on 29 January. As per the Economic Survey, the Indian economy is expected to expand by 6.8-7.2% in FY27, supported by strong macro fundamentals and a series of regulatory reforms.
It also noted that India’s core and headline inflation rates are likely to be higher in FY27 than in FY26. As of November 2025, India’s fiscal deficit stood at 62.3% of the Budget Estimates, and the government aims to attain a fiscal deficit target of 4.4% of GDP by FY26, the survey noted.
Fiscal consolidation also remains to be a cornerstone of the Budget as the economists have believed the government will continue its glide path towards reducing the fiscal deficit, supported by buoyant tax collections and higher dividend payouts from public sector enterprises, while protecting capital spending on infrastructure.
Targeted measures are also anticipated for labour-intensive sectors such as manufacturing, construction, textiles and MSMEs. In their budget expectations, Industry bodies have also sought enhanced incentives under the Production Linked Incentive (PLI) schemes and greater access to affordable credit for small businesses.
Expectations are also higher on measures to improve farm incomes, enhance irrigation and storage infrastructure, and expand support for allied activities such as dairy and fisheries. Economists say a stronger rural push could help revive consumption demand.
A report by the State Bank of India (SBI) has mentioned that the central government should announce reforms across taxation, insurance and pension sectors to boost household financial savings, reduce compliance challenges and improve social security coverage in the country.
. VK SAS PRS