India's fiscal deficit for April-December was 9.14 trillion rupees ($105.58 billion), or 56.7% of the estimate for the financial year, government data showed on Friday.

India is set to meet its 4.5% fiscal deficit target by 2026, balancing economic growth and fiscal prudence, said BofA. The upcoming budget may boost capital expenditure to reignite private sector growth while maintaining a stable revenue outlook and achieving medium-term fiscal objectives.

India’s government predicted the economy will expand 6.3%-6.8% in the coming fiscal year, a more moderate pace than the recent past and below the levels needed for Prime Minister Narendra Modi to meet his ambitious goals.

The Indian government's economic report, coming a day ahead of the annual budget, is likely to project GDP growth of 6.3-6.8% in 2025-26, according to two sources familiar with the matter.

GDP growth rate of India is expected to be between 6.3% and 6.8% for the financial year 2025-26. The Economic Survey predicts a decline in food inflation in the last quarter of FY25, aided by seasonal vegetable price drops and the arrival of the kharif harvest.