Nirmala Sitharaman said she had the resources to handle rising global risks when she spoke at the NDTV Profit Business Leadership Awards 2026 in Mumbai.
The remark mattered because India faces multiple external pressures — escalating tensions in the Middle East, volatile crude prices, higher shipping insurance premia and the El Niño-related erratic monsoon — all of which could push up inflation and widen subsidies. The finance minister stated there were no immediate plans to change the budget numbers and that specific fiscal measures and contingency allocations were in place.
Fiscal buffers and budget stance
The finance minister described the budget as containing targeted fiscal buffers sufficient to absorb shocks to energy and fertilizer imports without altering headline estimates. She highlighted provisions set aside to meet elevated risk insurance premia for ships traversing conflict-affected sea lanes and to support state-run oil companies that had been extended financial assistance earlier in the year.
Officials reiterated the government’s commitment to maintaining the stated fiscal trajectory, including the aim for a 4.3% fiscal deficit of GDP. To support that path, emphasis was placed on non-tax revenue measures and on matching additional spending with savings elsewhere in the budget structure.
Subsidy pressures: oil, LPG and fertilizer
The update integrated newer fiscal estimates showing that subsidy bills had expanded materially. The original allocation for fertilizer subsidies for FY27 stood at approximately Rs 1.71 lakh crore but rising global import prices for urea, DAP and feedstock such as natural gas had pushed projected requirements significantly higher.
Support extended to oil marketing companies — Indian Oil, BPCL and HPCL — had amounted to nearly Rs 1.23 lakh crore to help freeze retail fuel prices, while the LPG subsidy component was projected to cross Rs 1 lakh crore against more modest initial budget assumptions as global energy volatility persisted. Officials noted some softening in fertilizer prices in recent weeks, offering partial relief to budgetary pressures.
Growth signals and inflation outlook
Key demand indicators remained supportive of continued expansion, with strong readings in GST collections, export orders, e-way bill generation, electricity demand, digital payments and vehicle and tractor sales cited as evidence of resilience. The Reserve Bank of India had projected a robust 6.6% growth rate for 2026-27 despite supply chain disruptions and a deficient monsoon in some regions.
Policymakers flagged that food inflation and global energy costs would remain focal points for market participants. The government said it would monitor agricultural output, crude prices and shipping costs closely and was prepared to deploy the budgetary contingency lines if needed to contain inflationary spillovers.
Revenue measures and asset realisation
The finance ministry said it was actively pursuing non-borrowed fiscal levers to shore up resources. The Department of Investment and Public Asset Management had already delivered cash receipts of Rs 20,272 crore representing more than one-quarter of a stated target with two-thirds of the fiscal year remaining.
Officials signalled that the long-awaited IDBI Bank privatisation could provide a material boost to government coffers once finalised. Two bidders remained in contention for the transaction, and successful completion was described as a potential source of significant one-off receipts to strengthen the government’s fiscal cushion.
Parliamentary approval was envisaged for some additional expenditures where necessary, with the government indicating a preference to meet new commitments through offsetting savings or asset realisation rather than by deviating from its fiscal framework.
Ultimo aggiornamento: 27 July 2026
