India’s finance minister sees modest fiscal consolidation in budget
India’s government is set to make significant strides in its fiscal outlook for the upcoming financial year, aiming to reduce the fiscal deficit and debt while also focusing on boosting manufacturing across various sectors such as textiles and semiconductor chips.
During her ninth consecutive budget speech, Finance Minister Nirmala Sitharaman announced plans for the fiscal deficit to decrease to 4.3% of GDP in the 2026-27 financial year, down from 4.4% in the previous year. Additionally, India aims to lower its debt-to-GDP ratio to 55.6% in the same period.
Sitharaman acknowledged the current uncertainties facing India, citing challenges related to trade, multilateralism, supply chain disruptions, and the increasing demands on resources posed by new technologies.
The government’s strategy includes promoting manufacturing in key sectors such as semiconductors, pharmaceuticals, textiles, and sports goods, among others. This move is aimed at driving economic growth and enhancing India’s position in the global market.
Following Sitharaman’s speech, India’s Nifty 50 stock index experienced a slight decline, reflecting market reactions to the budget announcements. However, the country’s economic survey projects a robust growth rate of 6.8% to 7.2% for the fiscal year 2027, outperforming many other major economies.
PwC India highlighted the budget as a pivotal moment for India’s transformation, emphasizing the importance of financial stability and readiness for future challenges and opportunities, particularly in areas like AI adoption, talent development, infrastructure enhancement, governance, and trust-building.
