India, Jan. 30 -- The Union Budget for the coming fiscal year is being presented at a moment of unprecedented global turbulence. The global economy is being shaped by tariffs, trade wars, and political upheaval. Supply chains remain fragile, geopolitics is intrusive and economic nationalism is back in fashion. Yet amid this global unease, it is a relief to see India in a relatively stable position. Inflation is low, growth is recovering, high-frequency data is encouraging, and macroeconomic indicators are largely under control. That stability gives the government space to act. It is heartening that the central question before Budget 2026 is no longer how to rescue the economy from crisis. That phase has passed. The task now is to steer India towards sustained, high-quality growth without losing macro-discipline. In many ways, this is a far better problem to have. I come from the markets and interact with industry leaders, exporters and investors regularly. There is broad agreement among economists and market participants on one key point: The heavy lifting on stimulus has already been done by the government led by Prime Minister Narendra Modi. What the economy now needs is patience, reform and better coordination, especially between the Centre and the states. Budget 2026 should reflect this shift in mindset. Budget 2025 marked a decisive policy moment. Without waiting for a crisis, the government delivered a strong mix of structural reforms, fiscal support and monetary easing. Capital expenditure was protected, GST was rationalised and tax relief was provided to accelerate growth. The Reserve Bank eased liquidity and reduced interest rates significantly. Taken together, these actions amounted to a large, pre-emptive stimulus. Slowly but steadily, the results are beginning to show. Domestic demand is improving. Consumption is stabilising as purchasing power recovers. Labour market conditions are better than a year ago. Growth is picking up pace, even if unevenly. This is precisely why there is no need for another large stimulus round. The economy needs time for existing measures to fully play out. Budget 2026 should build on this foundation. Fiscal discipline must be preserved. Targeting a fiscal deficit of around 4.2% of GDP would keep India on course to gradually reduce public debt towards 50% of GDP and bring the deficit closer to 3% by the end of the decade. Growth over the next year is expected to be driven primarily by domestic demand, not exports. India's GDP growth is projected to average around 7% in FY27. Inflation should remain close to RBI's 4% target, giving policymakers flexibility. The current account deficit remains manageable, supported by services exports and remittances, even as trade uncertainties with the US persist. India cannot afford to become a prisoner of Washington's whims. In this context, the India-European Union Free Trade Agreement signed recently is strategically important. Against rising protectionism and fractured supply chains, the deal signals India's quiet shift from defensive trade posture to confident global engagement. It opens wider access to one of the world's largest consumer markets while strengthening India's ambition to become a manufacturing and export hub. For Europe, it offers diversification away from China and deeper ties with a fast-growing economy. One of the most pressing structural challenges is the growing imbalance between equity and debt financing. Household savings behaviour has changed sharply. Younger generations are saving less. More savings are flowing into real estate and gold, while equity investments within financial savings have risen rapidly. A vibrant equity culture is healthy. But relying too heavily on equity while neglecting debt is risky at this stage. A better balance would strengthen the system in three ways: Stronger bank deposits would support the next credit cycle; MSMEs, which depend more on credit than equity, would gain better financing options; and higher domestic savings would help fund government borrowing internally, reducing reliance on foreign capital and supporting economic self-reliance. Two policy steps can help. First, gradually narrow the large tax gap between equity and debt investments. Today, equity enjoys a significant advantage, discouraging households from fixed-income products. Second, expand debt instruments and allow more flexibility for global investments, easing pressure on equity valuations while attracting foreign capital. State-level reform also deserves attention. While the Centre has pushed manufacturing and infrastructure, growth cannot accelerate evenly unless states act. Uttar Pradesh, Maharashtra, Andhra Pradesh and Telangana have shown what is possible. Electricity reforms in some states have strengthened distribution companies, creating space for lower industrial tariffs. Maharashtra's move to allow shops to operate 24x7 and relax labour norms shows how simple administrative changes can drive economic momentum. These are state subjects. All states can act. India also faces a balance-of-payments challenge despite record FDI inflows, driven by large capital outflows as investors book profits. Taxing outflows would be a mistake. The solution lies in encouraging longer-term investment, diversifying capital pools and simplifying taxation through mechanisms such as GIFT City. Looking ahead, the next phase of public capex should focus on manufacturing and urban infrastructure. Highways and railways have seen strong investment. Urban roads, housing and city infrastructure are the next growth drivers. Targeted industrial support and controlled recurring expenditure will be key. Ultimately, Budget 2026 should not be about dramatic announcements. It should be about follow-through....