'If you go by the capital expenditure, this is a good defence budget. But we will have to see if the government can keep defence spending at 2 per cent or higher in 2027-2028.'
The army has been behind the other two forces in capex since FY21.
Supported by strong buoyancy in public sector capital expenditure (capex), growth in infrastructure investment is expected to accelerate in 2025-26 (FY26) compared to 2024-25 (FY25), according to the First Advance Estimates of gross domestic product (GDP) for FY26 released by the National Statistics Office (NSO) on Wednesday.
The forthcoming Budget could think of maintaining public capital expenditure at 3 per cent so that domestic resources are available for private investments, points out N R Bhanumurthy.
Defence expenditure was pegged at 1.4 per cent of GDP in the Budget for 2025-26 but it may widen, depending on tensions between India and Pakistan.
For the first time, the government is likely to dip into the Oil Industry Development Fund (OIDF) to finance part of its fertiliser subsidy programme for 2025-26, according to official sources. The finance ministry has accounted for Rs 23,000 crore in the FY26 Budget as net additional resources to be drawn from dedicated reserve funds, including the OIDF, the Agriculture Infrastructure and Development Fund, and the Universal Service Obligation Fund.
Experts say Indian Railways must grow its share in the freight market to remain financially sustainable.
Finance Minister Nirmala Sitharaman will present her 8th straight Budget and all eyes will be on the much-expected tax relief for the middle class. Sitharaman had in her first Budget in 2019 replaced the leather briefcase -- which had been in use for decades for carrying Budget documents -- with a traditional 'bahi-khata' wrapped in red cloth.
Deloitte on Thursday projected economic growth at 6.5-6.7 per cent for the current fiscal, as tax incentives provided in the Budget are expected to push domestic demand amid an uncertain global trade environment. Deloitte estimated India's GDP growth at 6.3-6.5 per cent for FY25 and said that the economic outlook for FY26 hinges on a delicate balance between evolving trade relations and government efforts to boost domestic consumer demand.
The interest rate on these schemes have remained unchanged for over a year now.
Finance Minister Nirmala Sitharaman on Saturday unveiled 'transformative' tax reforms that ranged from a simpler income tax law to higher TCS threshold for remittances and income tax benefits for middle class.
The government in FY26 Budget should announce an "effective" personal income tax cut to support consumption and demand, Barclays said on Thursday. In its FY25-26 Union Budget preview, Barclays said the key ask from the Budget, to be presented on February 1, is to support growth while adhering to fiscal consolidation path.
While the capital spending is being maintained at 3.1 per cent of the GDP, a little more would have boosted economic growth even further, suggests Rajiv Memani.
It will be the second Budget of the Modi 3.0 government and eighth straight Budget for Nirmala Sitharaman, rare in Indian polity.
The US Trade Representative noted that India's average applied tariff rate stood at 17% per cent, the highest of any major world economy.
'It has also outlived its initial purpose of reducing physical gold imports.'
Using the debt-to-GDP ratio as a fiscal anchor aligns with efforts to promote fiscal transparency through proper disclosure of off-budget borrowings.
This will be the first full-year Budget of the BJP-led National Democratic Alliance government since it came to power for a third consecutive term in July last year.
Paraphrasing Abraham Lincoln, Finance Minister Nirmala Sitharaman on Sunday described the Union Budget as "by the people, for the people, of the people", and said Prime Minister Narendra Modi was fully behind the idea to cut taxes for the middle class but it took time to convince the bureaucrats. "We have heard the voice of the middle class" who had been complaining about their aspirations not being met despite being honest taxpayers, she told PTI in an interview.
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