New Delhi, Jan. 23 -- India's Union Budget 2026-27 is expected to keep taxes largely unchanged while reinforcing capital expenditure as the main driver of growth in FY27, a DBS Group report said.

Radhika Rao, Senior Economist at DBS, said policymakers are likely to focus on execution over fresh allocations, with capex estimated at 3-3.1 percent of GDP, reinforcing infrastructure-led growth. The report added that emphasis will be on shovel-ready and greenfield projects, along with concessional support for state-level capex to sustain public investment.

Fiscal Discipline and Revenue Outlook

DBS said India's post-pandemic fiscal position has strengthened, with the central deficit halving and earning a sovereign outlook upgrade in 2025. De...