Lower-than-budgeted tax collections and softer nominal GDP growth are squeezing India’s fiscal assumptions, raising the risk that the government may need to cut capital expenditure. The move would be aimed at protecting the 2025–26 fiscal deficit target, even as weaker revenues and growth make budget math harder to meet.
India’s fiscal deficit for FY27 is likely to exceed the budgeted target, with BMI projecting it could reach about 4.5% of GDP. The pressure is linked to policy responses to the West Asia conflict, including support for firms, higher energy and fertilizer subsidies, and possible export curbs on critical inputs like helium and sulphur. Infrastructure spending may also be deferred to contain costs.
Your news, in seconds
Get the Beige app — every story in 60 words, updated hourly. Free on iOS & Android.
The Centre plans to raise about Rs 8 lakh crore via dated securities between April and September 2026-27, the finance ministry said. The borrowing is aimed at funding the government’s revenue gap. The move highlights how fiscal needs are being met ahead of the first half of the next financial year, potentially shaping bond market expectations.
Swipe through stories, personalise your feed, and save articles for later — all on the app.
