FY26 Budget preview: Fiscal deficit & Gross Borrowing to be closely watched The finance minister will table the Union Budget on 1st Feb for FY26; this will be the first full-year budget for the re-elected government. This Budget comes against the backdrop of a sharper than anticipated slowdown in real GDP growth, persistence in food inflation, and a rapid depreciation in currency. It would be interesting to see if the Budget would emphasize upon measures to boost consumer spending, and if there are any tweaks within the income tax slab distribution. The fiscal glide path as presented in the July 2024 full year budget noted bringing the fiscal deficit below 4.5% in the next financial year, though we believe that the GOI is likely to maintain a conservative estimate of 4.5%. The slowdown in economic growth, amid elevated inflationary pressures could potentially limit the scope of heavy consolidation
