Budget 2026: FY27 Fiscal Deficit Target 4.2%, Focus on Consumption, Industrial Output

• The government's Amrit Kaal vision Phase-II shifts focus to boosting economic output through industrialization and exports.
• FY27 budget is expected to continue supporting consumption and increasing industrial output, with potential minor tax relief.
• Expansion of Performance-Linked Incentive (PLI) schemes is anticipated for sectors like semiconductors, EVs, and renewables.
• Increased allocation for Deep Tech and Sunrise Sectors is expected, building on the INR 1 lakh crore RDI fund.
• Relief measures are likely for labor-intensive and tariff-affected sectors such as textiles, leather, and toy manufacturing.

Why It Matters: Budget 2026 targets a 4.2% fiscal deficit for FY27, prioritizing consumption, industrial growth, and strategic sectors.