By Ajay kumar | CEO & Editor-in-chief
New Delhi, India (UNA) : During a pre-Budget interaction with the Prime Minister, leading economists highlighted potential fiscal risks arising from sustained high levels of government expenditure. The discussions focused on the need to balance growth-oriented spending with long-term fiscal sustainability, especially as India prepares its next Union Budget. Overall fiscal conditions have been shaped by elevated public capital expenditure over recent years, which has supported infrastructure creation and economic momentum. However, economists noted that prolonged high government spending could limit fiscal flexibility and crowd out private investment unless recalibrated in a phased and measured manner. A key concern raised was the decline in household financial savings, which reduces the availability of domestic capital needed to fund investment and government borrowing. Lower savings rates, combined with rising interest obligations, were flagged as factors that could intensify fiscal stress if left unaddressed. Economists suggested aligning expenditure plans more closely with medium-term fiscal responsibility targets while ensuring capital spending remains efficient and productivity-enhancing. They also stressed the importance of policy measures to encourage household savings through financial inclusion, stable returns and structural reforms in savings instruments. Market participants view these deliberations as significant ahead of the Budget, noting that credible fiscal management and a balanced investment strategy could strengthen macroeconomic stability and investor confidence in the Indian economy.