About one and a quarter months is left for the presentation of the general budget. In such a situation, on one hand, the expectations of the common people increase every time from the budget, while on the other hand, the government has to try to reduce the fiscal deficit and increase development. In such This report indicates that the government can strengthen domestic demand by providing targeted fiscal support through the upcoming Union Budget. This will support economic growth and will be in line with the growth-oriented monetary policy of the Reserve Bank of India.

Domestic demand will have to increase

According to global consulting firm EY, possible cuts in income tax and GST rates in the current financial year may put some pressure on government revenues. But an increase in non-tax revenue and a possible reduction in revenue expenditure will make it possible to achieve fiscal deficit and capital expenditure targets.

The report also said that recently announced measures like excise duty on tobacco products and National Security and Public Health Cess have been approved by the Parliament and will be implemented after notification. EY India’s Chief Policy Advisor D.K. Srivastava believes that going forward, India may have to depend more on its strong domestic demand for economic growth and the general budget for the financial year 2026-27 along with the policies of RBI can provide additional stimulus.

Growth rate likely to strengthen

According to the ‘EY Economy Watch’ report, the contribution of net exports to GDP growth may remain negative in the near future due to global headwinds, as seen in recent quarters. However, India’s growth rate may remain strong in the medium term due to a pick-up in domestic private investment and reduction in global supply chain disruptions.

EY estimates that India can maintain an average growth rate of around 6.5 percent, while RBI has estimated the GDP growth rate to be 7.3 percent for the current financial year.

Also read: ‘Kept alerting people, became a victim himself’, IPS officer cheated of Rs 8 crore; Know how to trap

India Fiscal Deficit: India’s economy on Friday gave such signals as if a runner suddenly picks up speed in a long race and alerts everyone present in the field. GDP grew at 8.2% in the July–September quarter, the fastest jump in the last six quarters. This growth in the same quarter of the last financial year was only 5.6%. The 7.8% increase in the April-June quarter also looks a bit calm in front of this new pace.

GDP—the economic heartbeat and its new movements

GDP is the same old familiar economic heartbeat—the total value of goods and services produced within a country’s borders over a period of time. After the improvement in GST rates, consumption increased, and in this hope factories increased production. As a result, the manufacturing sector grew at a pace of 9.1%, whereas a year ago the same sector was seen growing at only 2.2%. Manufacturing contributes about 14% to GDP, and its acceleration energizes the entire structure.

Fiscal deficit—a huge step

On the other hand, a figure also emerged which added some worry to the happy atmosphere. Fiscal deficit in the first seven months of 2025–26 reached 52.6% of the full year target. In the same period last year it was 46.5%. This difference shows the growing gap between the government’s income and expenditure.

According to CGA:

Fiscal deficit in April–October 2025: Rs 8.25 lakh crore

Full year estimate: Rs 15.69 lakh crore (about 4.4% of GDP)

picture of government income and expenditure

The total income of the Center in the April-October period was approximately Rs 18 lakh crore.

Tax revenue: Rs 12.74 lakh crore

Non-tax revenue: Rs 4.89 lakh crore

Non-debt capital income: Rs 37,095 crore

Rs 8.34 lakh crore was given to the states as tax share, which is more than last year.

On the other hand, the total expenditure of the government was Rs 26.25 lakh crore.

Revenue expenditure: Rs 20 lakh crore

Capital expenditure: Rs 6.17 lakh crore

In revenue expenditure:

Interest payment: Rs 6.73 lakh crore

Major subsidies: Rs 2.46 lakh crore

This bi-polar picture of the economy—a rapidly pulsating GDP on the one hand, a slightly heavier fiscal burden on the other—is as if the high notes and the deep notes are playing together in the same music. The balance between the two will decide the future.

Also read: Work news: Will your pension stop after November 30? Know why such questions are being raised