Budget 2026: Rising defence and infrastructure needs likely to test India’s fiscal targets

Union Budget: Indias FY2026-27 budget is expected to see higher defence and capital expenditure as the government balances fiscal consolidation with growing domestic and external spending pressures, according to BMI, a Fitch Solutions firm. While the government may target a 4.3% fiscal deficit, the actual deficit is projected at 4.6%, driven by investments in infrastructure, research and development, and railways.