India, Dec. 24 -- The Union Budget for 2026-27 may reinforce growth by backing strong domestic demand through targeted fiscal support, complementing the RBI's growth-oriented monetary stance, the EY Economy Watch report said on Tuesday.

It said although there may be some revenue sacrifice due to income tax and GST reforms during the current fiscal year, some unbudgeted additional receipts under non-tax revenues and some reduction in the budgeted magnitude of revenue expenditures may still enable the Government to adhere to the budgeted targets for fiscal deficit and capital expenditure.

Also, two revenue enhancing measures have recently been announced relating to excise duty on tobacco products and national security and public health ce...