The State Bank of India has forecasted a landmark increase in capital expenditure to over Rs 12 lakh crore in the FY 2026-27 budget—a 10% jump from prior levels—aimed at fortifying India’s infrastructure backbone. Released mid-week, the report underscores strategic investments amid evolving economic challenges.
Focus areas include expansive highway projects, railway upgrades, port enhancements, and power sector expansions. These initiatives are expected to drive GDP acceleration, spawn jobs, and attract private capital, fostering a resilient growth ecosystem.
Navigating global uncertainties like economic fragmentation and rising debts demands unwavering fiscal discipline. India’s post-COVID resurgence, superior to the post-GFC phase, provides a strong foundation for this ambitious agenda.
Tax revenues may see marginal growth, non-tax steady, with nominal GDP at 10.5-11% amid commodity-driven inflation risks. Fiscal deficit targets 4.2% of GDP, with flexibility from GDP base revisions.
Central net borrowing pegged at Rs 11.7 lakh crore (repayments Rs 4.87 lakh crore); states at Rs 12.6 lakh crore (repayments Rs 4.2 lakh crore). RBI OMOs will balance these pressures effectively.
Policy prescriptions emphasize savings mobilization: equalize deposit interest tax with LTCG/STCG, standardize FD lock-ins to 3 years like ELSS, elevate TDS thresholds. For GST, refine ISD definitions, skip TDS on banking GST, and overhaul insurance-pension for wider inclusion.
State debt management calls for GSDP-linked medium-term plans over short-term deficits. Union Budget emphasis here could revolutionize sub-national finances.
SBI’s insights offer a roadmap for a budget that catalyzes development while safeguarding stability, positioning India as a global growth engine.