S&P Global Ratings has reaffirmed confidence that India will achieve its fiscal 2027 deficit target despite lower tax collection projections in the latest Union Budget. The agency highlighted that large dividends from the central bank and potential capital underspending will support fiscal consolidation alongside infrastructure and manufacturing growth.
S&P Global Ratings has stated that India’s Union Budget reinforces expectations of gradual fiscal consolidation while balancing growth priorities. The agency believes that despite the government budgeting for lower tax collections, India remains on track to meet its fiscal 2027 deficit target. This confidence stems from continued large dividends from the Reserve Bank of India and the likelihood of capital underspending, which will help offset revenue shortfalls.
The budget’s emphasis on infrastructure development and manufacturing incentives reflects the government’s dual strategy of fiscal discipline and economic expansion. Analysts note that this approach strengthens India’s macroeconomic stability while supporting long-term growth.
Key highlights from the announcement include
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India expected to meet fiscal 2027 deficit target despite lower tax collections.
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Support to come from central bank dividends and potential capital underspending.
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Union Budget reinforces gradual fiscal consolidation path.
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Balanced focus on infrastructure development and manufacturing push.
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Strategy aimed at sustaining stability while driving investment and job creation.
Industry experts emphasize that India’s ability to balance fiscal responsibility with growth imperatives enhances investor confidence. The Union Budget is seen as a step toward strengthening resilience and competitiveness in the global economy.
Sources: S&P Global Ratings, Reuters, Economic Times, Business Standard