India’s top economists have reportedly advised Finance Minister Nirmala Sitharaman to maintain strong momentum on capital expenditure in the Union Budget 2026–27, even if it means slower fiscal consolidation, given global geopolitical uncertainties. This was a key takeaway from the pre-budget consultations held by the Finance Ministry on Monday under Sitharaman’s leadership.

Attendees included Prime Minister’s Economic Advisory Council members Sajid Chinoy and Neelkanth Mishra, former Finance Commission member Indira Rajaraman, Crisil chief economist Dharmakirti Joshi, Nomura’s Sonal Varma, Morgan Stanley India MD Ridham Desai, CDS director C. Veeramani, NIPFP professor Lekha Chakraborty, Swadeshi Jagran Manch co-convener Ashwini Mahajan, and Chief Economic Advisor V. Anantha Nageswaran.

Economists reportedly emphasized that continued high public capital spending is vital to sustain growth, citing the slowdown in the housing market and the need to stimulate private investment. The government had raised public capex to ₹11.21 trillion (3.1% of GDP) in the 2025–26 Budget, up 10.1% from the previous year’s revised estimate, with spending rising 40% year-on-year to ₹5.8 trillion in the first half of the fiscal.

In another meeting, agricultural experts, farmers’ representatives, and economists urged higher allocations for agricultural research and education, which have declined in real terms over the past two decades, to strengthen resilience against climate change. Some participants highlighted the growing debt burden of state governments, warning that their borrowing costs often exceed those of private firms, restricting investments in human capital. They called on the Centre to find mechanisms to prevent excessive debt transfers to future generations.

Experts also suggested boosting domestic production of pulses and oilseeds to cut import dependence, aligning import duties so that landed prices stay above MSP, and having the animal husbandry department take a more active role—a proposal the Finance Minister reportedly supported. Further, several economists recommended overhauling the Pradhan Mantri Fasal Bima Yojana by having the Centre cover 90% of premiums to improve farmer satisfaction, and restructuring fertiliser subsidies by increasing urea prices by 25%.