Budget 2026: FY27 Fiscal Deficit May Hit 4.3% GDP, Capex to See Double-Digit Growth - ICRA

• ICRA projects the FY2027 fiscal deficit target at 4.3% of GDP, a slight reduction from FY2026's 4.4% estimate.
• Capital expenditure is expected to increase by 14% to 13.1 lakh crore rupees in FY2027.
• Net tax revenue for FY2026 is estimated to have a 1.3 lakh crore rupees shortfall, while non-tax receipts are 80,000 crore rupees higher.
• Financial pressures may intensify from FY2028 due to increased mandatory expenses from the 8th Central Pay Commission recommendations.
• Gross market borrowing is anticipated to rise by 15-16% to 16.9 lakh crore rupees, driven by bond redemptions.

Why It Matters: ICRA forecasts a 4.3% fiscal deficit for FY2027 and significant capital expenditure growth in Budget 2026.