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Anand Rathi Report

Anand Rathi expects the forthcoming Union Budget for FY27 to reinforce policy continuity rather than introduce major surprises. The macro-fiscal backdrop is materially stronger than a year ago, aided by improving revenue visibility, sustained buoyancy in non-tax revenue and a clearly articulated medium-term fiscal consolidation framework anchored to debt-to-GDP rather than the fiscal deficit alone.

On this backdrop, the government is likely to balance gradual consolidation with continued emphasis on capex, manufacturing incentives, and ease of doing business, while containing revenue expenditure.

The brokerage expects the FY27 fiscal deficit at ~4.2% of GDP (FY26: 4.4%), consistent with the glide path required to achieve a central government's debt-to-GDP ratio of ~50% (+/–1%) by FY31e. Notably, this consolidation path assumes nominal GDP growth of ~10% and does not materially constrain growthsupportive fiscal policy in the near-term.

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