ICRA Insight

February 2026

Foreword

We are pleased to present the February 2026 edition of ICRA Insights, bringing you timely analysis and research-backed perspectives on India’s evolving economic and sectoral landscape.

This month’s Monthly Macro Wrap captures an eventful period, marked by the Union Budget, the Economic Survey, the 16th Finance Commission’s recommendations, and the Monetary Policy Committee’s (MPC) continued policy pause. It highlights why fiscal consolidation remains achievable, how small savings inflows support the borrowing programme, and what the upcoming GDP print could signal for FY2027 growth expectations.

Our Spotlight on CSR showcases a powerful milestone from our partnership with FWWB, where we celebrated 35 women entrepreneurs in Gandhinagar, championing financial inclusion, enterprise development and community-led impact.

In Research Recap, we bring you insights across sectors, from evolving dividend norms for banks and trends in domestic and international aviation, to the fiscal arithmetic and capex thrust in Union Budget FY2027.

This edition also features webinar details, rating updates, methodologies, media coverage, and our latest podcast by Ms. Madhura Nejjur on India-EU free trade agreement. We hope you enjoy this edition and continue to find our updates insightful and relevant.

K. Ravichandran

Chief Ratings Officer, ICRA Limited

Aditi Nayar

Chief Economist, ICRA Limited

Monthly Macro Wrap

Aditi Nayar unpacks a dynamic few weeks for India’s economy covering the Economic Survey, Union Budget, the 16th Finance Commission’s recommendations, and the MPC’s policy pause while sharing what to watch in the upcoming GDP print. She explains why the FY2027 fiscal deficit target is on track, how small savings can ease the borrowing pressures, and the implications of the new devolution formula for states. Stay tuned for next month’s Macro Podcast.

Listen to the podcast

Spotlight
on CSR

When Women Grow, Communities Thrive

ICRA CSR, in partnership with FWWB, celebrated 35 women entrepreneurs in Gandhinagar, honouring their journey toward business growth and self-reliance, while reaffirming its commitment to fostering women-led enterprises and community impact. Click here to know more!

Research Recap

Banking

The RBI’s draft guidelines have provided a boost to dividend flexibility for banks with strong core capital, though the actual payouts may not rise much. Higher limits benefit banks with robust CET1, while most PSBs and PVBs already operate near or below their permissible dividend thresholds.

Airlines

Domestic air passenger traffic fell to 143.4 lakh in Dec 2025, down 3.9% YoY and 5.9% MoM amid lower capacity. Yet traffic grew 1.3% in 9M FY2026, while international traffic for Indian carriers continued to record strong YoY growth.

Union Budget FY2027

The FY2027 Union Budget balances growth and stability, with the capex rising 11.5% to Rs. 12.2 trillion and the effective capex being up 22%. The fiscal deficit eases to 4.3% of GDP, while the debt GDP ratio trends lower, supporting credible fiscal math.