Societe Generale’s Kunal Kundu reviews India’s FY27 EU budget, highlighting policy continuity and fiscal consolidation in the context of geopolitical tensions and currency weakness. The note highlights modest funding for jobs programs, questions the implementation of six specific targets and warns that without more revenue, investment spending could be cut again to meet the deficit target of 4.3% of GDP.
Fiscal consolidation, but investment outlays at risk
“Amid geopolitical tensions, trade uncertainty, currency weakness and investor skepticism about growth rates, India’s FY27 Union Budget presented on February 1, 2026, emphasized policy continuity and fiscal consolidation.”
“Among various announcements, the focus on data centers and GCCs (Global Capability Centers) is likely to be a major enabler of one of the important growth engines in India, as is increased support for India’s nuclear power program.”
“The budget has proposed six key areas of focus. However, implementation gaps remain key areas of concern for India’s ability to achieve its targets.”
“Despite the declared focus on employment from 2024, funds for job creation programs are modest and actual expenses are even greater.”
“If the priority is to meet the FY27 deficit target without more revenue, capital expenditure may once again become an adjustment lever.”
(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)
