New Delhi, January 23 (IANS). Global financial services company Nomura said on Thursday that the central government may make changes in the income tax slab in the upcoming general budget for 2025-26 to encourage consumer spending.
Nomura also predicted that the budget will focus on both fiscal consolidation and growth supporting measures by the government.
The financial services firm expects India to exceed its fiscal deficit target for FY2025 and peg the deficit at 4.8 per cent of gross domestic product (GDP), slightly lower than the earlier forecast of 4.9 per cent. .
This change has occurred due to reduction in capital expenditure (capex) spending. For FY2026, Nomura estimates capital expenditure to remain at 4.4 per cent of GDP, which is in line with India’s medium-term goals.
Nomura also expects public capital expenditure to grow by 12.5 percent year-on-year in fiscal year 2026.
Nomura expects an increase in import duty on gold, expansion in foreign direct investment (FDI) limits in the insurance sector and steps to boost capital inflows to support the rupee.
Furthermore, the financial firm said India’s gross market borrowings will grow marginally in FY26 and reach Rs 14.4 lakh crore, from Rs 14 lakh crore in the current fiscal. At the same time, net market borrowing will fall to Rs 11.03 lakh crore, which is Rs 60,000 crore less than in FY25.
Additionally, Nomura believes the government will take a balanced approach in the budget. This will help the Reserve Bank of India (RBI) to reduce the repo rate in the Monetary Policy Committee (MPC) meeting to be held in February.
–IANS
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