Union Budget 2026: Stronger Revenues to Fuel Infrastructure Spending

• ICICI Bank Global Markets report suggests India can sustain infrastructure spending in Union Budget 2026 due to stronger revenue collections.
• Buoyant revenues could allow infrastructure spending to remain around 3.1% of GDP while pursuing fiscal consolidation.
• The 2025-26 fiscal stance included tax and GST measures (0.9% of GDP) that supported demand but impacted tax collections.
• Achieving the 4.4% fiscal deficit target for 2025-26 may require expenditure restraint and careful spending prioritization.
• A more favorable revenue outlook for 2026-27, driven by improving demand and both tax/non-tax receipts, offers greater fiscal flexibility.

Why It Matters: Stronger revenues in Union Budget 2026 could enable India to maintain infrastructure spending while consolidating fiscally.