New Delhi, Jan. 21 -- The Finance Minister, in the upcoming Union Budget 2026, is likely to refrain from further fiscal consolidation in FY27, according to a report by Nuvama.

The report said the Indian economy is bottoming out, but growth impulses remain weak. While tax cuts announced in 2025 are helping select pockets of consumption, the benefits may not spread widely due to anticipated spending cuts aimed at meeting the FY26 gross fiscal deficit (GFD) target of 4.4 per cent of GDP.

It stated, "For FY27, monetary easing done so far must be complemented with fiscal support to enhance its effectiveness. Hence, while fiscal expansion is unlikely, we forecast the FM would refrain from further consolidation in FY27"

For FY27, the report n...