New Delhi, Feb. 4 -- A new Morgan Stanley analysis indicates that India's fiscal and monetary policies are increasingly aligned to support economic growth, coinciding with expectations of a cyclical recovery.

The report emphasises that while the Union Budget maintains fiscal consolidation at a pace slightly faster than expected, it simultaneously introduces measures to boost consumption and capital expenditure to drive economic expansion.

The government's strategy reflects a careful balance between stimulating demand and preserving macroeconomic stability.

The Budget sets an ambitious fiscal deficit target of 4.4 percent of GDP for FY26, surpassing Morgan Stanley's projected estimate of 4.5 percent, while incorporating provisions for e...