Budget for FY27 pegged at ₹54L crore, up 7.9% YoY
01 Feb 2026

Union Finance Minister Nirmala Sitharaman is likely to present a ₹54.1 lakh crore Union Budget for FY2026-27, according to a report by Sunidhi Securities & Finance Limited.

The budget is expected to show a year-on-year (YoY) growth of 7.9%.

The size of the Union Budget, in terms of Total Expenditure (TE) as a percentage of GDP, is seen as an indicator of the government's fiscal intent.

Total expenditure for FY26 budgeted at 14.2% of GDP
Fiscal projections

For FY26, the Total Expenditure was budgeted at 14.2% of GDP, or ₹50.65 lakh crore, in the Budget Estimates (BE).

However, given weaker nominal GDP growth and lower revenue buoyancy, the report estimates Revised Estimates (RE) for FY26 Total Expenditure at around 14% of GDP or ₹50.15 lakh crore.

This is a slight downward revision from initial projections due to economic factors affecting fiscal performance.

TE for FY27 estimated at ₹54.1L cr
Future outlook

For FY27, the report estimates Total Expenditure at ₹54.1 lakh crore, indicating a 7.9% YoY growth.

This projection is in line with a calibrated fiscal consolidation path rather than fiscal tightening.

The report also predicts a moderation in expenditure to about 13.8% of GDP in FY27, indicating gradual consolidation in fiscal policy and commitment to macroeconomic stability without significantly affecting growth support.

Fiscal deficit target for FY27 pegged at 4.16% of GDP
Deficit projection

The report estimates the FY27 fiscal deficit target at 4.16% of GDP or ₹16.37 lakh crore, down from 4.4% of GDP or ₹15.69 lakh crore in BE FY26.

While the deficit is expected to rise in absolute terms, its decline as a share of GDP indicates continued progress toward fiscal consolidation.

This reflects a balanced approach to managing public finances while supporting economic growth and development initiatives.

India enters budget phase with strong real economic momentum
Economic resilience

The report highlights that India enters the Budget 2026-27 phase with strong real economic momentum.

The Central Statistical Office estimates FY26 real GDP growth at 7.4%, reaffirming the resilience of the underlying economy.

It also points out that GST reforms implemented in September last year have led to a sharp recovery in urban demand, improving growth momentum during the latter half of FY26.