New Delhi, Feb 3 (PTI) – Finance Secretary Tuhin Kanta Pandey on Monday emphasized that the FY26 Budget has introduced a non-inflationary stimulus aimed at fostering incremental economic growth while maintaining macroeconomic stability.
Speaking at a post-budget interactive session organized by the Federation of Indian Chambers of Commerce & Industry (Ficci), Pandey highlighted that the budget strikes a crucial balance between growth and inflation. He underscored the government's commitment to fiscal consolidation while ensuring that stimulus measures enhance both demand and supply dynamics.
Additionally, the fiscal deficit target for FY26 has been set at 4.4% of GDP, with the FY25 target lowered by 10 basis points to 4.8% of GDP. These measures are aimed at maintaining fiscal discipline while supporting economic expansion.
"We need fiscal consolidation because we don’t want an inflationary approach. If we stimulate at the wrong time, it could undo inflation control efforts and prove counterproductive," he noted.
The budget includes measures addressing both demand-side and supply-side concerns, particularly in the agriculture sector. Pandey pointed out that unchecked food inflation could lead to persistently high interest rates, impacting industries, the middle class, and overall economic growth.
"If structural supply issues in food production are not resolved, inflation will persist, keeping interest rates high. This not only affects industry but also burdens the middle class with higher equated monthly installments (EMIs)," he explained.
With a focus on fiscal prudence, demand stimulation, and supply-side improvements, the FY26 Budget sets a roadmap for steady economic expansion while keeping inflation in check.
Speaking at a post-budget interactive session organized by the Federation of Indian Chambers of Commerce & Industry (Ficci), Pandey highlighted that the budget strikes a crucial balance between growth and inflation. He underscored the government's commitment to fiscal consolidation while ensuring that stimulus measures enhance both demand and supply dynamics.
Key Budget Highlights for Growth and Stability
Union Finance Minister Nirmala Sitharaman, in the FY26 Budget, raised the income tax rebate limit to ₹12 lakh, effectively exempting individuals earning up to this amount from income tax. This move is expected to boost disposable income, encouraging either increased savings, investments, or consumption.Additionally, the fiscal deficit target for FY26 has been set at 4.4% of GDP, with the FY25 target lowered by 10 basis points to 4.8% of GDP. These measures are aimed at maintaining fiscal discipline while supporting economic expansion.
Balancing Growth with Inflation Control
Pandey acknowledged the challenges in balancing fiscal consolidation and economic stimulation. He cautioned that excessive stimulus could lead to inflationary pressures, reversing the progress made in controlling inflation."We need fiscal consolidation because we don’t want an inflationary approach. If we stimulate at the wrong time, it could undo inflation control efforts and prove counterproductive," he noted.
The budget includes measures addressing both demand-side and supply-side concerns, particularly in the agriculture sector. Pandey pointed out that unchecked food inflation could lead to persistently high interest rates, impacting industries, the middle class, and overall economic growth.
"If structural supply issues in food production are not resolved, inflation will persist, keeping interest rates high. This not only affects industry but also burdens the middle class with higher equated monthly installments (EMIs)," he explained.
Ensuring Economic Stability
Highlighting the importance of macroeconomic stability, Pandey stressed that maintaining a balanced approach between inflation control and growth is essential. Exchange rates, fiscal discipline, and long-term economic strategies have all been factored into the budget to ensure sustainable development.With a focus on fiscal prudence, demand stimulation, and supply-side improvements, the FY26 Budget sets a roadmap for steady economic expansion while keeping inflation in check.
