New Delhi, Jan 20 || The wave of reforms are likely to feature prominently in the Union Budget 2026-27, an HSBC report said on Tuesday, adding that given a slew of announcements in recent months, the government is in a mood for further reforms.
The central government budget will be presented on February 1, followed closely by the RBI policy meeting on February 6.
“We believe the government will focus on two pillars during such time – restraint and reforms,” the report mentioned.
The report expects the government to meet its FY26 fiscal deficit target of 4.4 per cent of GDP. The tax rate-cut led fall in revenues will likely be partly filled by strong RBI and PSU dividend, and partly by lower current expenditure.
“We expect that pruning of schemes will help the government lower its expenditure in FY27, and we forecast a fiscal deficit of 4.2% of GDP,” the HSBC report said.
It also expects an unchanged net borrowing bill of Rs 11.5 lakh crore in FY27. A high redemption bill (despite assumption of some switches) would bump up gross borrowing (to Rs 16 lakh crore).