New Delhi, Jan. 30 -- The upcoming union budget should increase the capital expenditure (Capex) by at least 20 per cent to revive domestic demand, private consumption and ensure sustainable GDP growth says the EY Economy Watch January 2025 report.

It says the government is expected to continue on its fiscal deficit reduction path, bringing it down to 4.4 per cent of GDP in FY26. A strategic focus on investment and spending reforms will help balance fiscal prudence with economic expansion.

DK Srivastava, Chief Policy Advisor at EY India, said, "As we navigate a challenging economic landscape, the upcoming budget must balance fiscal prudence with growth-oriented measures. Increasing capital expenditure and putting more disposable income i...