Budget 2026: India to Balance Debt Consolidation with Infra Push, Says ICRA

• India's Budget 2026-27 will prioritize medium-term debt consolidation while sustaining capital expenditure, according to ICRA.
• The budget is significant as it aligns with the 16th Finance Commission's recommendations for fiscal transfers.
• ICRA projects the Centre’s fiscal deficit at 4.3% of GDP in 2026-27, supported by 9.8% nominal GDP growth.
• Direct tax collections are expected to grow by 11%, while indirect tax growth remains muted at 2% due to GST rate reductions.
• Gross market borrowings could rise by 15-16% to Rs 16.9 trillion due to higher capital spending and debt redemptions.

Why It Matters: Budget 2026 will focus on debt reduction and infrastructure growth, with fiscal deficit projected at 4.3%.