Maintain fiscal consolidation, but don't overdo

The central government should prioritize job creation, increase public capex, introduce reforms in governance of PSUs/PSBs, and grant tax reliefs to the middle class in the upcoming Union Budget for FY26, TT Ram Mohan, member, Economic Advisory Council to the Prime Minister, says.

- TT Ram Mohan, Member, Economic Advisory Council to the Prime Minister

In an interview with Priyansh Verma, he says some budgetary long-term targets, such as that of the fiscal deficit, are not helpful in practice, however attractive these may appear in theory. Excerpts:

What should be the focus areas of the upcoming Union Budget?

Sustaining GDP growth by maintaining public capital expenditure, at least at the level of last year, maintaining fiscal consolidation but not overdoing it, maintaining the focus on the job-creation incentives announced in last year's Budget, and pushing through governance reforms in PSUs/PSBs, such as measures to strengthen boards of directors, should be the focus areas, in my view.

How can the Budget boost urban as well as rural consumption?