Government Budgeting

India's fertiliser subsidy bill for 2026-27 is set to overshoot the Budget Estimate of about Rs 1.71 lakh crore, with the Department of Fertilizers seeking a near-100% hike as the West Asia crisis and the Strait of Hormuz disruption push up the cost of imported urea, DAP and feedstock. State-owned firms have floated fresh import tenders and the government is exploring supplies from Russia. This article explains how India's fertiliser subsidy works, the Nutrient Based Subsidy (NBS) and urea regimes, the DBT mechanism, India's deep import dependence, and the fiscal and policy challenges ahead.

On March 27, 2026, the Union government reduced the special additional excise duty on petrol and diesel by Rs 10 per litre each to shield consumers and oil marketing companies from rising global oil prices caused by the West Asia conflict. At the same time, it imposed an export levy of Rs 21.5 per litre on diesel and Rs 29.5 per litre on aviation turbine fuel (ATF) to discourage exports and ensure enough supply remains in the domestic market. Retail pump prices of petrol and diesel will not change, but the move will help reduce losses of public sector oil companies.

The International Monetary Fund's (IMF) latest Fiscal Monitor report, released in October 2025, has flagged a sharp rise in global public debt, forecasting it to exceed 100% of GDP by 2029—the highest level since 1948. This comes amid growing pressures from higher interest rates and increased spending needs, raising alarms about fiscal stability worldwide. For India, with its public debt at around 81.4% of GDP, the report underscores relative resilience but warns of potential vulnerabilities if deficits persist, as echoed in analyses from The Economic Times and The Hindu.

The Comptroller and Auditor General of India (CAG) has unveiled a pioneering decadal study on the finances of all 28 Indian states, spanning from 2013-14 to 2022-23. This report spotlights a dramatic threefold rise in combined public debt, climbing from Rs 17.57 lakh crore to Rs 59.60 lakh crore, amid warnings about states increasingly borrowing for everyday expenses rather than long-term investments, potentially jeopardizing economic stability.

Prime Minister Narendra Modi has introduced sweeping GST reforms aimed at stimulating domestic consumption and economic resilience amid escalating global trade tensions and looming U.S. tariffs. The changes involve streamlining the tax structure, providing immediate relief to consumers and MSMEs, and potentially repositioning India’s growth trajectory.