Union Budget FY 27 Reinforces Government's Commitment to Economic Stability

India’s Union Budget reflects the government’s sustained commitment to safeguarding macroeconomic stability, anchored in a measured and gradual strategy to reduce public debt while continuing to prioritise a strong capital expenditure programme. This balanced approach is designed to support medium- to long-term growth prospects, ensuring that fiscal consolidation does not come at the cost of development-oriented spending, Fitch Ratings said on Monday.

While the budget did not outline any immediate, large-scale reform initiatives, Fitch noted that this should not be interpreted as a lack of reform intent. Instead, the agency expects further policy measures to be introduced in due course, particularly aimed at easing regulatory constraints and advancing the broader deregulation agenda to improve the business environment and investment climate.

Fitch also highlighted that India’s solid GDP growth trajectory continues to generate favourable momentum across several sovereign credit metrics, including revenue performance and debt sustainability indicators. If this growth momentum is sustained over the coming years, it could gradually strengthen the country’s overall credit profile, even as certain fiscal challenges—such as deficit management and debt servicing obligations—remain areas of ongoing focus.