Nominal GDP and growth assumptions
The first number markets will watch is the government’s nominal GDP growth assumption for FY27. This figure determines revenue projections, borrowing needs, and fiscal space. A stronger nominal growth assumption would provide room for higher spending without widening the deficit. The nominal GDP growth was estimated to be around 10 per cent in FY26 last year.
Fiscal deficit target
The fiscal deficit glide path remains the most closely tracked indicator of macro stability. Investors will look for whether the government sticks to its consolidation roadmap or opts for a slightly wider deficit to support growth. Any change in this number has direct implications for bond yields, borrowing costs and sovereign ratings sentiment. In Union Budget 2025, the government estimated the fiscal deficit at 4.4 per cent of the GDP for FY26.
Capital expenditure (capex)
Government capex allocation will be another critical number. Over the last few years, public infrastructure spending has acted as the main growth engine. Analysts expect another meaningful increase in railways, roads, defence and urban infrastructure, with capex acting as the government’s preferred stimulus tool. Last year government spend over 11 lakh crore for capital expenditure meant for building physical assets like road, railways, etc.
Personal income tax relief
For households, the spotlight will be on income-tax slabs, standard deduction, and rebate thresholds. Any relief here could provide a boost to consumption, especially in urban markets, at a time when discretionary spending remains uneven. Last year, the government gave the middle class a reason to cheer about as the government increased the tax-free bracket for people earning up to Rs 12 lakh per annum.
Subsidies and welfare outlay
Allocations for food, fertiliser and fuel subsidies will signal how the government plans to balance fiscal prudence with welfare support. With global commodity prices volatile, this number will indicate how much pressure public finances may face.
Disinvestment and asset monetisation
Another key figure will be the disinvestment and asset-monetisation target. Progress on this front determines how much non-tax revenue the government can mobilise to fund infrastructure without expanding borrowing.
Borrowing programme
The gross market borrowing number will be crucial for bond markets. A higher borrowing programme could put upward pressure on yields, while a restrained number would support financial stability.
State transfers
Finally, tax devolution and grants to states will shape spending capacity across the country. This figure has implications for state-level infrastructure, welfare programmes and capital projects.
Together, these numbers will offer the clearest picture of how the government intends to balance growth, fiscal discipline and social spending in FY27—making Union Budget 2026 one of the most closely watched fiscal statements in recent years.
