Budget 2026 expectations: Navigating India’s fiscal future

In this episode of Budget Insights, a podcast series from EY India Insights, Dr. D.K. Srivastava, Chief Policy Advisor at EY India, highlights areas that Budget 2026 could focus on in terms of fiscal consolidation, growth amid geopolitical uncertainties and government expenditure priorities. A distinguished economist and member of the Advisory Council to the 16th Finance Commission, Dr. Srivastava provides macroeconomic perspectives on tax revenue trends, expenditure patterns and revised estimates, offering a nuanced view of the emerging economic landscape.

Key takeaways

• To maintain a fiscal deficit–to–GDP ratio of 4.4% in FY26, adjustments — particularly in revenue expenditure — may be necessary to offset the shortfall in revenue receipts.
• Broadly, the nominal growth assumption for FY27 could be around 9.5%, supported by a real GDP growth projection of 6.5%.
• With major personal income tax and GST reforms already implemented, Budget 2026 is unlikely to introduce significant tax changes.
• The quality of fiscal consolidation has improved, reflected in the decline in the revenue deficit–to–fiscal deficit ratio.
• Revenue expenditure rationalization remains key, driven largely by further reductions in subsidies.

Tune in to understand how Budget 2026 may shape India’s fiscal strategy by balancing consolidation with growth