When stability risks masking stagnation

By conventional macroeconomic yardsticks, India should enter FY27 Budget cycle with a degree of comfort.

- Shivaji Sarkar

Growth is expected to remain above 7%, inflation has eased from its post-pandemic peaks, and fiscal consolidation appears broadly on track, with the fiscal deficit projected to narrow to around 4.4% of GDP. On the surface, in a slowing global environment, the economy looks resilient.

Yet budgets are not written for periods of comfort; they are crafted to anticipate stress. Beneath reassuring aggregates lie deep structural pressures that the Budget cannot afford to overlook—weak household savings, skewed public expenditure, a hesitant manufacturing sector, fragile private investment, external trade risks, and a farm economy mired in low productivity. Stability, in short, risks masking stagnation.