THERE ARE several things to commend in Union Finance Minister Nirmala Sitharaman’s ninth full budget. First, the continued focus on fiscal consolidation. Sitharaman has achieved the budgeted 4.4 per cent of GDP target for 2025-26, despite a huge Rs 1.63 lakh crore shortfall in tax collections. For the coming fiscal year, she has targeted a fiscal deficit of 4.3 per cent. Alongside, there is an emphasis on bringing down the Centre’s debt stock from 56.1 per cent of GDP in 2025-26 to 55.6 per cent in 2026-27. Seen in the context of the deficit and debt to GDP ratios reaching 9.2 per cent and 61.4 per cent in the Covid year of 2020-21, this represents a remarkable commitment to fiscal prudence.

Second, this consolidation has taken place even as the Centre’s capital expenditure has more than doubled, from Rs 4.26 lakh crore to Rs 10.96 lakh crore between 2020-21 and 2025-26. For 2026-27, the capex has been budgeted at Rs 12.21 lakh crore. Simply put, the quality of government spending has improved with more money being allocated to growth stimulating avenues. Third, there is a well-meaning emphasis on scaling up domestic manufacturing in strategic and frontier industries such as biologics........

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