Budget 2026: Finance Minister Nirmala Sitharaman unveiled Modi 3.0's Budget 2026 on Sunday, Feb. 1 with India Inc calling it a 'non-event' afetr no major announcements were made for income tax slabs or sector-specific allocations. According to Neelkanth Mishra, Chief Economist and Head-Global Research of Axis Bank, some of the macroeconomic and fiscal projections made in Budget 206-27 could pose a challenge for the government to tackle the financial system going further.
In an exclusive interview with NDTV Profit on Monday, Feb. 2, Mishra pegged Budget 2026-27 as 'completely predictable', but 'in a good way'. The economist has also flagged some concerns on the fiscal projections made in Budget 2026 which was positioned by FM Sitharaman as a continuation of 12 years of economic stability and disciplined fiscal stewardship.
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Axis Bank's Neelkanth Mishra On Budget 2026
''In order for the government to help bring down the long-term cost of capital, the reduction of policy uncertainty is a very important factor and therefore, the government announcing medium-term fiscal consolidation and stiocking to it, is the most important thing,'' Mishra told NDTV Profit. ''To achieve that goal without any dramatic changes to taxation by maintaining the quality of expenditure at a very healthy level are all very positive developments. Hence, Budget is a big positive,'' he added.
Mishra highlighted that the conservativeness the government has used in projecting a nominal GDP number or tax projections is a concern. ''The extension of that on financing of deficit, if say Rs 17 lakh crore is the deficit, then how to finance it? The assumptions made are at a risk of undoing the remarkable fiscal deficipline that we've seen. So some assumptions make no sense to me or little sense to me,'' Mishra told NDTV Profit.
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Fiscal Projections In Budget 2026
''As a result of that, the gross borrwoing target has turned out to be higher than what bond markets expected and yields have actually gone up when they should have been going down,'' he added. Explaining the fiscal math, Mishra said it is a two step process. ''I don't see a challenge with fiscal math, by assuming 10% nominal GDP growth, even 10-and-a-half is possible. An improvement is likely in the coming year as the government has adequate buffer. Even if there is a signficant slowdown in global economy or if a war pushes up global crude oil prices, some buffers exist in the fiscal math itself,'' he added.
According to the economist, financing of the deficit through various channels is a challenge. ''The assumptions made are too conservative and it is quite likely that the government will end with very large cash balance which then creates disruptions in the financial system,'' he told NDTV Profit. The Budget introduced a series of reforms to deepen financial markets, accelerate green transitions and modernise regulatory frameworks.
Comprehensive Budget 2026 coverage, LIVE TV analysis, Stock Market and Industry reactions, Income Tax changes and Latest News on NDTV Profit.