In the first detailed official response after the West Asia crisis, Expenditure Secretary V Vualnam signalled rising fiscal uncertainty, warning of mounting stress even as the government stays committed to capital spending.“The Union Budget now feels like a very long time back, though it’s only three months ago,” Vualnam said, underscoring how quickly the macro environment has shifted.
He said fiscal discipline has placed the government “on a good footing in these uncertain times,” but cautioned that visibility remains крайне limited. “It is very difficult to know what will unfold even the next day or even in a few hours,” he noted.
Flagging near-term pressures, Vualnam said, “the coming quarters and even days are going to be very difficult, with a lot of stress points,” adding that “it has been a very challenging situation.”He acknowledged that while the government is trying to manage the evolving scenario, “there are systemic challenges.”
On the fiscal front, he highlighted that stress extends beyond LPG. “Petrol and diesel prices have not been increased, while excise duty has been cut,” he said, indicating pressure on revenues.Despite this, he reiterated that capital expenditure will remain a priority. “The government will continue to preserve and focus on capex. We will make full use of the capex outlay and provide sufficient funds despite the stress points,” he said.Responding to a question by economist NK Singh on whether the “Goldilocks moment” is over, Vualnam said the situation has “indeed changed,” adding that the buoyancy of gross tax receipts is now a “big question.” He said the focus will shift towards improving the quality of expenditure and the quality of government spending.On subsidies, Vualnam flagged a potential spike in fertiliser outgo.“Fertiliser subsidy may go up by ₹50,000 crore,” he said, adding that the government will rework budget numbers.“We are only a month into the new fiscal. I will not be surprised if FY27 fertiliser subsidy exceeds the Budget estimate by ₹50,000 crore,” he noted.
Adding to the government’s broader economic outlook, DIPAM Secretary Arunish Chawla stressed the need to “get the basics right for the next decade,” calling for a sharper focus on building strategic depth in value-added agriculture and manufacturing.Chawla said India should not be disheartened by current job data, highlighting that employment potential remains strong across agricultural and allied value chains. Chawla also flagged professional services and deep-tech sectors as key growth areas that can drive future job creation and economic expansion.
First Published: May 1, 2026 12:51 PM IST
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