‘Escalating geopolitics, climate change pose risk to growth prospect’

What are three key policy initiatives you are expecting in FY27?

The three key areas requiring policy interventions are incentivising States in adopting the ease of doing business measures related to land and labour; skilling the youth to make them employable; and tax policy certainty combined with faster dispute resolutions in government contracts for attracting investments and fast-tracking project execution. There can be reform-linked capital expenditure to States, higher allocations for skilling programme through a PPP mode with corporates and acceptance of arbitral awards in project disputes by the government.

Considering the external challenges, what are important announcements you expect in the forthcoming Budget?

The important announcements I would like to see in the Budget are PPP based common infrastructure creation for MSMEs towards greening and increasing quality of outputs including use of emerging technologies, tax relief to enterprises in sectors adversely affected by trade protectionism and higher allocation for R&D and AI infra creation.

Do you see fiscal deficit missing the mark for FY26?

The government will be able to meet its fiscal deficit targets despite some tax revenue shortfall. This will be made up by higher dividends from RBI and public sector units to a large extent. The transfer to the compensation fund for States for GST shortfall is also likely to be much lower. The revenue expenditures are also likely to undershoot the budget estimates with lower spending under MGNREGA and centrally sponsored schemes given the inability of many States to make the matching grants and hence not being able to provide the utilisation certificates for release of central funds besides lower outgo on the food subsidy.