Budget 2026 Likely To Prioritise Economic Stability & Fiscal Discipline: Crisil Chief Economist

New Delhi, Jan 24 (KNN) The upcoming Union Budget is expected to focus on economic stability and fiscal discipline, supported by stronger-than-expected growth and lower inflation, according to Dharmakirti Joshi, Chief Economist, Crisil. 

“The budget is being prepared under a much better-than-expected growth and inflation scenario. Growth proved to be higher than expected, and the inflation was much lower than expected," Joshi said, speaking to ANI.

Growth and Fiscal Support

He noted that higher nominal GDP in 2026–27 should support tax collections and corporate earnings, helping the government manage its finances.

The government has raised its GDP growth estimate for 2025–26 to about 7.3–7.4 per cent from 6.3 per cent earlier, in line with IMF projections. Growth is expected to moderate to around 6.7 per cent in the following year. 

Joshi added that the GDP data re-basing scheduled for February 27 could change estimates of economic size and growth.

External Risks and Trade Deals

Despite the positive outlook, Joshi cautioned that global economic uncertainty and volatility persist. He stressed the need for trade agreements with the US and the European Union to provide clarity to exporters, noting that India faces relatively high global tariffs and delays in negotiations could raise risks.

Fiscal and Investment Trends

On fiscal trends, Joshi said the Centre is likely to meet its deficit targets, but warned that higher-than-budgeted borrowing by states has kept government bond yields elevated.

He said private investment is improving in sectors such as steel, cement, and oil and gas, but added that the recovery is still uneven and not yet broad-based.

Policy and Tax Outlook

The budget is expected to continue reforms linked to the Viksit Bharat by 2047 vision. Joshi said sectors such as electronics manufacturing and advanced chemistry cell batteries may receive policy support.

On taxes, he said frequent changes are best avoided, as recent reforms have already simplified income tax and reduced GST rates.

(KNN Bureau)