Did the Budget for FY27 lack a big picture push? Well, Finance Minister Nirmala Sitharaman has a different take. She pointed out that “If growth is the priority, I cannot be excessively aggressive on fiscal tightening either.”
In an exclusive interview with Financial Express, FM Sitharaman reiterated that. “If my primary statement is that I have to take care of growth, how can I be even more ambitious about fiscal discipline?”
The comments come amid concerns that the Budget’s consolidation path is too slow, with the fiscal deficit pegged at 4.3% of GDP for FY27, marginally lower than 4.4% in FY26.
Budget framed “realistically”, says FM
Sitharaman said the Budget was framed with realism and was not designed around any single event. “People have asked me why I’m not ambitious enough. I’ve replied that this Budget is prepared realistically, and that’s good,” she said.
It was also argued that the Budget should not be treated as an “incident-specific event”, and that the framework was built to accommodate both an “uptick or downtick” through the year.
Reforms not limited to Budget announcements
The Finance Minister pushed back against the view that the Budget lacked a big-picture reform push, saying reforms were undertaken throughout the year and not only through the annual Budget exercise. “Reforms don’t happen only through the Budget; they are continuous,” she said.
On the outlook for revenues, Sitharaman indicated that buoyancy could take time to recover, especially after the government’s recent tax relief measures. “Revenue buoyancy will take a while to pick up because I have given Rs 12 lakh (I-T exemption), GST cuts, and so on. I see signs of (revenue) improvement, but I must balance growth and fiscal discipline,” she said.
GST collections were cited as a positive indicator. “The GST revenues have risen again to Rs 1.93 lakh crore (for January 2026). Refunds are low. If this continues, we may cross Rs 2 lakh crore sooner,” she said.
Customs duties were downplayed as a major revenue driver. “Customs duty never gave us huge revenues anyway,” she said.
No additional scheme planned to unlock tax disputes
Asked whether a special scheme could be introduced to realise more tax arrears and unlock funds stuck in disputes, Sitharaman said no such plan was currently under consideration beyond an already-announced disclosure window.
“I have already announced a scheme for assets that are abroad… Other than that, nothing is under consideration now,” she said, referring to the Foreign Assets of Small Taxpayers – Disclosure Scheme 2026.
Deficit reduction cannot come at the cost of growth
Sitharaman said the Budget’s growth approach was anchored in manufacturing and jobs, alongside public spending on services such as skilling, education and health.
It was underlined that tightening the deficit too sharply would invite criticism for constricting growth, even as a slower consolidation pace also drew scrutiny. “If I were more aggressive on deficit reduction, the same critics would say I’m constricting growth,” she said.
Sitharaman also indicated that options to boost non-tax revenues were being explored, including monetisation of equity in large listed central public sector enterprises (CPSEs). “We are looking into it,” she said when asked whether the government could monetise equity in CPSEs by gradually reducing its holdings.