Priority is growth; demand seen keeping up pace, says Nirmala Sitharaman after Budget 2026

New Delhi: Finance minister Nirmala Sitharaman said she’s confident of consumption momentum being sustained in the coming months and that the trajectory of the fiscal deficit shows that the government’s priority is growth.In a post-budget interaction with the media on Monday, Sitharaman defended the increase in securities transaction tax (STT) on derivatives, saying it had been done to check speculation.

The February 1 budget pegged the fiscal deficit at 4.3% of GDP for FY27 against 4.4% in the financial year ending March 2026.

“This fiscal year, with the government’s priority being growth, I am comfortable with a 4.3 % deficit target. We will see how it goes,” Sitharaman said. The Centre has sharply cut its fiscal deficit in recent years from as high as 9.2% in the pandemic year of FY21.

Disinvestment

The minister said the government would step up disinvestment and asset monetisation, indicating that this would allow it to maintain fiscal consolidation while meeting the requirement of greater resources to honour revised Pay Commission awards, slated to kick in from FY28. “There is no change in the (disinvestment) policy,” she said, adding that it was on course. This was the case with the IDBI Bank strategic disinvestment as well, she said.

Senior officials had earlier said the government could select the winning bidder for IDBI Bank by this fiscal year-end. The government currently holds 45.48% and state-run Life Insurance Corp 49.24% in IDBI Bank. Together, both will offload a 60.72% stake in the lender-30.48% by the government and 30.24% by LIC.STT A deterrence

The increase in STT was a “sort of deterrence so that people do not go headlong into speculative” derivative trading. Indian retail investors have lost heavily in pursuit of what they expected to be outsize returns from futures and options (F&O).

The budget has proposed an increase in STT on futures contracts to 0.05% from 0.02%. STT on options premiums and exercise of options are proposed to be raised to 0.15% from the present rate of 0.1% and 0.125%, respectively.

“We have only touched the F&O trade, which is highly speculative,” Sitharaman said. “I have received calls from many parents saying their children are severely losing money, and also seeking government intervention. The STT hike in F&O will act as a deterrence so that people do not go headlong with that.”

The minister cited a study by the market regulator that said over 90% of retail investors’ trades in the F&O segment led to losses.

IBC amendments

The government intends to introduce the Insolvency & Bankruptcy Code (Amendment) Bill 2025 in the second half of the ongoing budget session.