Budget FY27: Fiscal Deficit Targets 4.2%, Boosts Consumption & Industrial Output

• The government aims for a 4.2% fiscal deficit by FY27, continuing its Amrit Kaal vision to transform India into a developed economy.
• Phase-II of the vision focuses on growing economic output through industrialization, increased exports, entrepreneurship, and an innovation ecosystem.
• The budget is expected to sustain support for consumption, including rural consumption through employment schemes and subsidies, and boost industrial output.
• PLI schemes will likely expand to electronics (semiconductors, mobiles, EVs) and clean-tech goods (renewables, green hydrogen).
• Capital expenditure for infrastructure and defense remains a pivotal theme, with significant allocations expected for power, renewables, and housing & urban affairs.

Why It Matters: The FY27 budget targets a 4.2% fiscal deficit, emphasizing consumption, industrial growth, and sustained capital expenditure.