New Delhi, Jan. 12 -- The Union Budget 2026 is likely to set 8.5-9% growth for next year and increase capital expenditure to Rs 12-12.2 lakh crores, said Sonal Badhan, Economist at Bank of Baroda.

"We expect the government to meet its fiscal deficit target of 4.4% for the Financial Year 2026 (FY26). For next year, we estimate that the deficit ratio will be lowered by 30-40bps (4-4.1%). Capex allocation will be of key interest. In the ongoing fiscal year, the government has already met approximately 60% of the budgeted target till Nov'25," Sonal said in an email interview with ANI.

Another piece of information to note is the assumption of nominal GDP for next year. We expect this number to be around 10%, she said.

She added that further...