FY27 Union Budget: Credibility, Continuity, and Capex Drive India's Growth

• The FY27 Union Budget prioritizes credibility, continuity, and execution over populism, aiming for steady growth and gradual fiscal consolidation.
• Fiscal deficit target set at 4.3% of GDP for FY27, a modest reduction from 4.4% in FY26, with debt-to-GDP ratio projected to ease to 55.6%.
• Public capex remains central, with Rs 12.2 trillion allocated for central capex (+11% YoY) and a broader 'capex plus' envelope of Rs 17.0-17.1 trillion (+12% YoY).
• Key sectors like Defence (+17%), Railways (+11%), Roads & Highways (+8%), MNRE (+30%), and Power (+39%) see significant capex increases.
• Securities Transaction Tax (STT) hike on derivatives is a near-term market headwind, but the budget supports capital markets through other rationalizations and investment pathways.

Why It Matters: The FY27 Union Budget emphasizes disciplined fiscal consolidation and strategic capex for India's long-term growth.