New Delhi, Jan. 25 -- Buoyant revenue streams give the government room to keep capital expenditure spending steady, at about 3.1 per cent of GDP, while continuing on the path of fiscal consolidation, according to a pre-Budget report by ICICI Bank Global Markets.

2025-26 was driven by both fiscal and monetary stimulus amid mounting external headwinds.

On the fiscal front, both income and GST stimulus totalled 0.9 per cent of GDP, as per the report. This has affected tax collections even as private demand has picked up. Hence, to achieve a fiscal deficit of 4.4 per cent in 2025-26, a cutback in spending may be needed to meet the fiscal target, it has asserted.

On a low base and rising demand, the revenue collection outlook for 2026-27 is...