Union Budget focus: Fiscal discipline, growth

The budget is also likely to lay out a roadmap for public debt sustainability, and financing India's energy security vs. transition needs.

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With the Union Budget for FY26 scheduled to be presented on February 1, 2025, a report by Goldman Sachs underlined two key concerns for policymakers, the pace of fiscal consolidation and the government's spending priorities.

The report highlighted that the upcoming budget will be crucial for balancing growth and fiscal discipline as India stands out for its high levels of public debt and fiscal deficit as compared with other emerging markets.

Goldman Sachs noted that the government is likely to keep the fiscal consolidation path intact, driven by the need to manage high public debt-to-GDP ratios.

However, the report cautioned that this fiscal tightening could act as a drag on economic growth in the upcoming fiscal year.