Page 18 - Policy Economic Report - Jan 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

April to December 2025, currently at 5.25%. The reductions have been aimed to boost credit flow,
investment, and overall economic activity.

Complementing policy rate cuts, the RBI reduced the cash reserve ratio (CRR) by 100 basis points to
3.0% during September-November 2025. In addition, the RBI injected durable liquidity of ?2.39 lakh
crore through open market operations during April-May 2025, followed by further OMO purchases
of ?1 lakh crore and a 3-year USD/ INR buy-sell swap of USD 5 billion in December 2025.

Union Budget 2026-27

Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget
for fiscal year 2026-27 on 1st February 2026. The budget focuses on stimulating economic growth,
supporting the middle class, and promoting inclusive development. Key highlights include:

o Fiscal Consolidation

The debt-to-GDP ratio is estimated to be 55.6 percent of GDP in BE 2026-27, compared to 56.1 percent of
GDP in RE 2025-26. A declining debt-to-GDP ratio will gradually free up resources for priority sector
expenditure by reducing the outgo on interest payments. In RE 2025-26, the fiscal deficit has been
estimated at par with BE of 2025-26 at 4.4 percent of GDP. In line with the new fiscal prudence path of
debt consolidation, the fiscal deficit in BE 2026-27 is estimated to be 4.3 percent of GDP.

o Revised Estimates 2025-26

The Revised Estimates of the non-debt receipts are ?34 lakh crore of which the Centre’s net tax receipts
are ?26.7 lakh crore. The Revised Estimate of the total expenditure is ?49.6 lakh crore, of which the capital
expenditure is about ?11 lakh crore.

o Budget estimates

Source- MoF

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