3 min readNew DelhiMay 2, 2026 05:28 AM IST
First published on: May 2, 2026 at 05:28 AM IST
Fiscal stress is “very much a reality” and there could be lots of stress points going ahead amid the ongoing West Asia conflict, but the government is focused on spending on priority sectors and capital expenditure, which will continue to be at the budgeted level of Rs 12.2 lakh crore, Expenditure Secretary Vumlunmang Vualnam said on Friday.
Stating that the LPG crisis has been a “challenging situation” with India importing about 60% of its requirement, of which 90% comes through Strait of Hormuz that has been impacted by the disturbance, Vualnam said the government has been proactive in tackling these situations.
However, there are also “systemic constraints” where one cannot really tackle off or wipe away all the impacts which are there, the Secretary said. For instance, beyond LPG, the cut in excise duties will also have a fiscal impact, he said.
“So, the fiscal stress is indeed very much a reality. But at the same time, the priority sectors, for example, the capex could really be a priority item, which we would like to preserve and ensure that it continues at the budgeted level of Rs 12 lakh crore,” he said as part of a panel discussion at the Ashoka University’s ICPP Growth Conference.
The capex focus will continue to be in the infrastructure sectors, he said. “It (capex) is an item, in spite of the savings, which is happily utilised by the concerned sectors…we would like to preserve and protect that, see that the highway sector, the railway sector…the shipping port sector, the urban sector make full use of that.
“We will on our part be committed to see that the required funds are provided in spite of all the stress points that may come up,” he said. When asked by former Finance Commission Chairman NK Singh whether India is still in a Goldilocks phase — characterised by sustained growth, low inflation and low unemployment — Vualnam said the situation has changed.
The Secretary pointed out there is a big question about how the buoyancy of gross tax receipts will be in the coming months in this changed
scenario. He stressed that the government will focus on the quality of expenditure and government jobs.
“The quality of the manpower pool that we have, government is a big employer. In the central government itself we have over 50 lakh employees who are regular full-time employees, so the quality of our employees, their performance, the output-outcome measurements, which the government has been focused over the last decade, how to sharpen it. And on the expenditure side, the priority items,” he said.
Besides capex, Vualnam said the government is focused on enhancing spending for research and development. “As a country, public and private combined, you spend too little on R&D, somewhere around just 0.6% of GDP, which is too less for a country to progress, for industry to progress and for development to happen.
So, R&D investments, not just in providing the resources, but also in the way of doing business has been modified,” he said, adding that the government is fully focused on streamlining the procedures and reduction of regulatory restrictions for ease of doing business.
Expenditure Secretary Vumlunmang Vualnam. (Express)
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