Why Union Budget 2027-28 should focus on resilience and reform
Mint - Opinion · Published 10 November 2026 · Last updated
The 2027‑28 Union Budget must prioritize fiscal resilience and job‑rich growth to safeguard India against external shocks and achieve Viksit Bharat.
Key points
- Finance Minister will present the Union Budget on 1 February 2027 amid a 7.8% real GDP growth in Q1 2024‑25.
- Real GDP growth was driven by private consumption, contributing nearly four percentage points, aided by GST 2.0 reforms.
- The Ashoka Isaac Centre for Public Policy (ICPP) estimates the 2026‑27 fiscal deficit could rise to 4.86% of GDP if energy disruptions last to December 2026, and to 4.94% if they extend to March 2027.
- The government has reaffirmed a debt‑to‑GDP anchor of 50% by FY 2030‑31 to reassure markets and rating agencies.
- Strategic oil reserves cover only five days of net imports, far short of the IEA’s 90‑day benchmark, prompting calls for expansion.
- Unemployment among 15‑29‑year‑olds stands at 16%, three times the overall rate, highlighting the need for job‑rich growth.
- Manufacturing’s share of GVA has stagnated at 15‑16% for a decade, while exports have shifted to capital‑intensive machinery.
- The author proposes tilting incentives to labour‑intensive sectors such as apparel, footwear, leather, food processing and electronics assembly.
Background
- India’s Viksit Bharat vision seeks a high‑income economy and a larger pool of quality jobs, targeting high‑income status beyond 2047.
- Since 2000, export composition has moved from textiles to capital‑intensive machinery, reducing labour‑intensive output.
- The GST 2.0 reforms were introduced in 2023 to simplify tax compliance and boost private consumption.
- India’s strategic oil reserve policy was formalized in 2018, setting a 5‑day target rather than the IEA’s 90‑day norm.
- The debt‑to‑GDP ceiling of 50% by 2030‑31 was first announced in the 2022 Union Budget as a fiscal credibility anchor.
Prelims facts and Mains angle for this issue are in the full SWAदेSH note.
Original report: Mint - Opinion