New Delhi, Jan 22 The government will likely unveil Budget 2026 with roughly Rs 53.5 trillion worth of total expenditure, a capital expenditure growth of about 15 per cent and a fiscal deficit target of 4.2 per cent, a report projected on Thursday.
The report from investment management firm OmniScience Capital said that tax revenues are projected to grow about 10 per cent year‑on‑year in FY27 on a nominal GDP growth assumption of around 9 per cent.
Non‑tax receipts are also expected to grow near 10 per cent, reflecting normalised dividend payouts and steady central public sector enterprise profitability (CPSE) without assuming exceptional transfers from the RBI, the report said.
Borrowings are projected to rise modestly by about 3 per cent year‑on‑year, implying a FY27 fiscal deficit of around 4.1–4.2 per cent of GDP, consistent with the ongoing consolidation path.
The report highlighted a structural transformation in successive Union Budgets over the past decade, with capex rising from roughly 20 per cent of total budgetary spending in FY16 to over 30.6 per cent in FY26.
The rising allocation for capex signalled a decisive shift towards asset creation and long-term growth, it noted.
Capital expenditure has grown at about 15 per cent compound annual growth rate (CAGR) over the past 10 years, materially outpacing revenue expenditure growth of 8.8 per cent.
This reflects a sustained policy focus on infrastructure development, productivity enhancement, and crowding-in of private investment, rather than consumption-led fiscal expansion, the report said.
The projected capex includes grants for capital assets. Total public capex is estimated at roughly Rs 17 lakh crore in FY27, reinforcing the infrastructure-led growth strategy.
Budgetary allocations continue to reflect continuity in fiscal priorities, with defence and core infrastructure remaining dominant spending heads, according to the firm.
"However, a gradual rebalancing towards technology, energy, and urbanisation, even as interest payments remain a structural constraint on revenue-side flexibility,” it said.
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