Overview
- Investors will track whether the government reaffirms the FY26 deficit goal of 4.4% of GDP and sets a tighter FY27 target, alongside borrowing plans that could influence bond yields.
- DBS expects the Centre’s FY27 capital outlay to hold near 3.1–3.2% of GDP, roughly 7% higher year on year, with an emphasis on shovel‑ready and greenfield projects and continued grants to states.
- Analysts anticipate priority for defence, semiconductors, electronics, renewables, and AI/robotics, including the proposed ISM 2.0 outlay of about INR 1.8 trillion and indications of a double‑digit rise in defence allocations.
- Tax policy watchers see scope for tweaks to income‑tax slabs and deductions under the default new regime, with analysts also flagging already announced increases on tobacco products.
- The consolidation framework now hinges on a debt‑to‑GDP anchor targeting roughly 50% by FY31, while deregulation efforts await a formal commission and social programs for GYAN groups are expected to persist.