...Fiscal

Where does the Budget stand as far as its fiscal math is concerned?

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This question is best addressed by examining three factors: the exogenous variable of nominal GDP growth, trends in tax buoyancy and the quality of spending rather than just its quantitative impact.The most important assumption is that inflation, more in terms of how it affects the GDP deflator than household budgets, will see some increase. It was a mere 0.6 percentage point in 2025-26 and is expected to be in the range of 2.8%-3.2% in 2026-27 if the Economic Survey's real growth projection of 6.8%-7.2% and the Budget’s nominal growth projection of 10% are to be read together. This is not an unreasonable assumption to make given how things stand right now. However, nominal growth’s importance will be extremely critical for the budget, not just this year but even in the medium term given the fact that debt trajectory and not one-off fiscal deficits will now be the critical marker of fiscal prudence.