Budget 2025: Focus to be on capex, fiscal health, says ICRA

New Delhi: The Union Budget 2025-26 will focus on capital expenditure while adhering to fiscal consolidation, job creation, relief for personal income taxpayers, and boosting manufacturing activity, ratings agency ICRA said on Wednesday.

Fiscal deficit is projected to be at 4.5% of the gross domestic product (GDP) in FY26, down by 25-30 basis points from the estimated 4.8% of GDP in FY25, according to ICRA.

The government set a fiscal deficit target of 4.9% of GDP for FY25.


The allocation for capex would increase by 12-13% to ₹11 lakh crore from an expected ₹9.7 lakh crore in FY25, according to ICRA, slightly below the FY25 target of ₹11.1 lakh crore.

Shortfall in capex from the target, due to general elections and above-normal monsoon would create a fiscal space to increase FY26 target, ICRA noted.