Budget 2026: It is time for fiscal discipline again

The Union Budget for the coming fiscal year is being presented at a moment of unprecedented global turbulence.

- Syed Zafar Islam

The global economy is being shaped by tariffs, trade wars, and political upheaval. Supply chains remain fragile, geopolitics is intrusive and economic nationalism is back in fashion.

Yet amid this global unease, it is a relief to see India in a relatively stable position. Inflation is low, growth is recovering, high-frequency data is encouraging, and macroeconomic indicators are largely under control. That stability gives the government space to act.

It is heartening that the central question before Budget 2026 is no longer how to rescue the economy from crisis. That phase has passed. The task now is to steer India towards sustained, high-quality growth without losing macro-discipline. In many ways, this is a far better problem to have.

I come from the markets and interact with industry leaders, exporters and investors regularly. There is broad agreement among economists and market participants on one key point: The heavy lifting on stimulus has already been done by the government led by Prime Minister Narendra Modi. What the economy now needs is patience, reform and better coordination, especially between the Centre and the states. Budget 2026 should reflect this shift in mindset.

Budget 2025 marked a decisive policy moment. Without waiting for a crisis, the government delivered a strong mix of structural reforms, fiscal support and monetary easing. Capital expenditure was protected, GST was rationalised and tax relief was provided to accelerate growth. The Reserve Bank eased liquidity and reduced interest rates significantly. Taken together, these actions amounted to a large, preemptive stimulus.