Govt May Raise Capex 20% To Spur Growth: EY

The FY26 Budget may project a 20% increase in capex spending to drive economic activity, leave more disposable income in the hands of people and target a fiscal deficit of 4.4% of GDP for the fiscal ending March 2026, a EY report said on Thursday.

- Press Trust of India

NEW DELHI:

EY India chief policy advisor DK Srivastava said amid continuing global uncertainties, India may have to rely largely on domestic demand drivers to support the growth momentum.

"The FY26 budget should therefore restore the momentum of growth in GoI's capital expenditure. This may be supplemented by some rate rationalisation and income tax deductions aimed at increasing personal disposable incomes, particularly in the hands of lower income and lower middle-income groups," he said.

The upcoming budget must balance fiscal prudence with growth-oriented measures.

Increasing capital expenditure and putting more disposable income in the hands of consumers, particularly urban consumers, will be pivotal to uplifting growth in domestic demand," Srivastava said.