India Union Budget FY28

 

UNION Budget FY28 UNION BUDGET FY28 OPERATIONAL CONTEXT, CHALLENGES, AND RECOMMENDATIONS   DATE: FY28 Planning Cycle

 R Kannan

1. Context and Fiscal Overview

The preparation for the FY28 Union Budget begins against a background of global geopolitical volatility and complex domestic structural realignments. Data from the Controller General of Accounts (CGA) and official circulars show that while Q1 FY27 revenue receipts reached approximately 29% of Budget Estimates (BE), the broader fiscal framework faces persistent challenges.

FY27 FISCAL SNAPSHOT
Total Budget Expenditure	₹53.4–₹53.5 Trillion
Public Capex Target	₹12.21 Trillion (3.1% of GDP)
Targeted Fiscal Deficit	4.3% of GDP
Debt-to-GDP Ratio	55.6%

 

The West Asia conflict—flaring after the FY27 presentation—has significantly altered baseline assumptions. Major maritime transport corridors such as the Strait of Hormuz face severe disruptions, driving up global import prices for essential commodities, fertilizer inputs, Liquified Natural Gas (LNG), and industrial chemicals.

GEOPOLITICAL TRANSMISSION MECHANISM ➔ GLOBAL GEOPOLITICAL SHOCKS: Strait of Hormuz Disruptions ➔ COMMODITY & INPUT PRICE SPIKES: Fertilizer, LNG, Industrial Chemicals ➔ DOMESTIC BUDGETARY PRESSURES: Fertilizer Subsidies > ₹1.70T | Food Subsidies ~ ₹2.50T | Revenue vs Capex Friction

 

Domestic spending demands have escalated sharply. India has already consumed over half of its ₹1.70 trillion fertilizer subsidy budget for FY27, while the food subsidy bill is projected to breach its baseline to reach ₹2.50 trillion due to elevated Minimum Support Prices (MSP) and aggressive procurement schedules.

 

Economists project that total budget outlays for FY28 will grow modestly by 4–5%, accompanied by a gradual fiscal deficit consolidation target near 4.0% of GDP. Managing this transition will require balancing macroeconomic stability with target-driven growth investments.

2. The 20 Major Challenges Facing FY28

20 MAJOR BUDGETARY CHALLENGES SUMMARY
1. Geopolitical Supply Shocks	11. Stagnant Private Capex
2. Fertilizer Subsidy Overruns	12. MSME Credit Access Gaps
3. Food Subsidy Creep	13. High Interest Payment Burdens
4. Narrow Fiscal Consolidation Space	14. Import Reliance on Criticals
5. Inflationary Nominal GDP Base	15. Rural Demand Asymmetry
6. Mid-Year Re-appropriations	16. Sub-optimal Offtake Capacities
7. High Central Debt-to-GDP	17. Trade & Tariff Volatility
8. Employment Creation Lag	18. Climate Shock & Agri Vulnerability
9. Energy Transition Capital Gap	19. State-Level Fiscal Divergence
10. Urban & Spatial Congestion	20. Exogenous Capital Outflows

 

1. Geopolitical Supply-Chain Shockwaves

Protracted conflict in West Asia and military bottlenecks across the Strait of Hormuz threaten India's energy and chemical input channels. Sudden spikes in freight, insurance, and landing costs compound trade deficits and import bill uncertainty.

2. Fertilizer Subsidy Overruns

Due to global input cost surges, India exhausted over 50% of its ₹1.70 trillion FY27 fertilizer allocation within the first quarter. Bridging this allocation gap in FY28 without blowing past fiscal limits represents a significant operational hurdle.

3. Food Subsidy Creep

Escalated Minimum Support Prices (MSP) alongside expansive public procurement mandates threaten to push the FY27 food subsidy bill from an estimated ₹2.28 trillion past ₹2.50 trillion. This structural shift crowds out discretionary capital spending.

4. Narrow Fiscal Consolidation Room

Consolidation from 4.3% of GDP toward 4.0% leaves minimal margin for administrative error. Any drop in revenue collection or unexpected expenditure spike could lead to fiscal slippage.

5. Inflation-Driven Nominal GDP Distortions

Growth projections rely partly on elevated nominal GDP figures (~11%), driven by domestic price pressures rather than volume expansion. Baseline revisions could artificially suppress real revenue metrics.

6. Frequent Mid-Year Budget Re-appropriations

Unrealistic forecasting by line ministries frequently forces mid-year spending adjustments. This practice fragments fund flow and slows project execution.

7. Elevated Debt-to-GDP Trajectory

Central government debt remains elevated near 55.6% of GDP. Servicing this sovereign debt consumes significant revenue, limiting fiscal space for modernizing infrastructure and expanding social safety nets.

8. Structural Employment and Skilling Gaps

While aggregate economic growth remains positive, labor absorption in formal, high-value sectors continues to lag. Youth unemployment and skill mismatches limit domestic consumption growth.

9. High Capital Requirements for Green Energy Transition

Transitioning to renewable energy, developing green hydrogen ecosystems, and scaling carbon capture infrastructure demand substantial public seed funding. Budgeting for these initiatives alongside immediate energy security needs creates significant resource allocation challenges.

10. Urban and Regional Spatial Congestion

Metropolitan growth faces spatial bottlenecks, transport congestion, and environmental degradation. Modernizing urban economic regions requires coordinated investment beyond historical budget levels.

11. Stagnant Private Capital Expenditure

Private corporate investments remain selective despite healthy balance sheets and strategic PLI incentives. The budget must continue heavy lifting through public infrastructure investments to encourage broader private investment.

12. MSME Credit and Working Capital Constraints

Micro, Small, and Medium Enterprises face structural barriers, including high financing costs, formal credit access limits, and delayed payments, which constrain their growth potential.

13. Heavy Sovereign Interest Burden

Interest payments consume a large share of net tax revenues. High fixed debt servicing limits discretionary spending for high-multiplier economic programs.

14. Import Reliance for Strategic Inputs

Concentrated import reliance on active pharmaceutical ingredients (APIs), critical minerals, rare earths, and specialized capital equipment leaves manufacturing supply chains vulnerable to global market shocks.

15. Rural Demand and Income Asymmetry

Agricultural growth remains vulnerable to variable weather patterns, suppressing rural consumption and widening the demand gap between urban and rural areas.

16. Variable Project Execution Across Line Ministries

Disparities in administrative capacity lead to unequal fund utilization. Lower spending efficiency across certain ministries risks leaving allocated public funds underutilized.

17. Global Trade Volatility and Tariff Shifts

Shifting trade policies, new cross-border carbon tariffs, and regional trade realignments create uncertainty for Indian export growth.

18. Climate Vulnerability in Agriculture

Extreme weather events increasingly impact agricultural output, driving up food price volatility and forcing unbudgeted disaster relief interventions.

19. State-Level Fiscal Divergence

Varying fiscal positions across states undermine synchronized nation-wide public investment goals. Capital expenditure absorption remains inconsistent across different regions.

20. Foreign Capital Volatility and Currency Pressures

Global interest rate fluctuations and external geopolitical risks drive short-term capital flow shifts, putting pressure on currency stability and domestic liquidity.

3. 10 Strategic Actions for a Vibrant, Growth-Oriented FY28 Budget

Action 1: Enforce Strict Expenditure Estimation and Zero-Based Allocation

Mechanism: Require line ministries to provide fully verified, audit-backed budget proposals prior to allocation. Establish a quarterly evaluation framework to limit routine mid-year re-appropriations.

Impact: Reduces unbudgeted spending gaps, improves capital efficiency, and maintains fiscal credibility while targeting a ~4.0% fiscal deficit.

Action 2: Scale Capital Outlays via Risk-Mitigated Crowding-In Strategies

Mechanism: Increase public capital expenditure beyond ₹12.21 trillion, focusing on asset-monetization frameworks, viability-gap funding (VGF), and public-private partnership (PPP) models.

Impact: Expands infrastructure development across freight routes, multi-modal transport hubs, and industrial waterways while encouraging private investment.

STRATEGIC EXECUTION ENGINE ➔ Public Capex Base (>₹12.21 Trillion) + Targeted VGF & Asset Monetization ➔ De-risked Projects in Freight, Logistics & High-Speed Corridors ➔ Unlocked Private Corporate Investment Growth

 

Action 3: Target and Rationalize Subsidies via Digital Infrastructure

Mechanism: Modernize fertilizer and food subsidy delivery using real-time soil testing data, Aadhaar-linked verification, and direct benefit transfers (DBT).

Impact: Limits fiscal leakage, buffers against global commodity price shocks, and redirects saved resources into capital projects.

Action 4: Capitalize High-Growth MSMEs via Specialized Growth Funds

Mechanism: Expand the SME Growth Fund and Self-Reliant India Fund with targeted credit-guarantee mechanisms and equity-funding windows for high-growth small enterprises.

Impact: Helps small businesses expand operations, upgrade technology, integrate into global value chains, and generate formal employment.

Action 5: Develop City Economic Regions (CERs) and High-Speed Logistics

Mechanism: Fund high-density City Economic Regions using a challenge-based funding allocation framework. Expand dedicated high-speed rail and industrial corridor networks.

Impact: Lowers domestic logistics costs, relieves urban infrastructure pressure, and accelerates regional economic development.

Action 6: Deepen Manufacturing Capabilities in Frontier Sectors

Mechanism: Extend production-linked incentives and duty-free capital equipment imports to advanced biomanufacturing, semiconductors, and specialized electronics.

Impact: Attracts foreign direct investment, reduces dependence on imported technology, and builds domestic manufacturing scale.

STRATEGIC EXECUTION ENGINE ➔ High-Tech Tooling & Duty Exemptions ➔ Bonded Warehousing & Custom Zones ➔ Safe Harbour Tax Incentives Implementation ➔ Competitive Advanced Industrial Manufacturing Hubs Established

 

Action 7: Establish Critical Mineral and Energy Security Frameworks

Mechanism: Secure strategic reserves for key minerals (such as lithium, cobalt, and rare earths) while funding carbon capture and battery energy storage technologies.

Impact: Protects domestic industries from international supply chain shocks and accelerates the clean energy transition.

Action 8: Expand International Financial Hubs and Data Center Ecosystems

Mechanism: Streamline safe-harbor tax rules for IT and global capabilities centers, and extend structured tax holidays for international financial service centers (IFSC) and data infrastructure.

Impact: Positions India as a regional hub for digital infrastructure, global treasury operations, and high-value service exports.

Action 9: Modernize Rural Industry and High-Value Agriculture

Mechanism: Direct capital support toward agricultural processing hubs, cold-chain logistics, cluster-based textile modernization, and rural enterprise programs.

Impact: Increases rural household incomes, diversifies agricultural earnings, and supports domestic demand.

Action 10: Streamline Tax Administration and Automated Compliance

Mechanism: Modernize tax administration using automated rule-based compliance systems, fast-tracked dispute resolution, and predictable safe-harbor provisions for foreign enterprises.

Impact: Reduces tax litigation, improves ease of doing business, and expands the formal tax base to support long-term revenue growth.

4. Operational Road Map for FY28 Execution

FY28 IMPLEMENTATION TIMELINE
PHASE 1: Consultations & Baseline Estimates	Oct 2026 – Nov 2026
PHASE 2: Inter-Ministerial Review & Scrutiny	Dec 2026 – Jan 2027
PHASE 3: Presentation & Parliamentary Approval	Feb 2027 – Mar 2027
PHASE 4: Implementation & Quarterly Monitoring	Apr 2027 Onward

 

October – November 2026 (Stakeholder Consultations): Conduct pre-budget consultations with representatives from agriculture, industry, MSMEs, and social sectors. Enforce zero-based expenditure reviews across all line departments.

December 2026 – January 2027 (Budget Scrutiny): Finalize Revised Estimates (RE) for FY27 and Budget Estimates (BE) for FY28. Reallocate unspent funds from low-performing programs to high-multiplier infrastructure projects.

February – March 2027 (Presentation & Approval): Present the Union Budget in Parliament, securing approval for key fiscal targets and structural reform initiatives.

April 2027 Onward (Execution & Tracking): Track capital project timelines and subsidy outlays using real-time digital dashboards to limit mid-year budget re-appropriations.

5. Conclusion

The FY28 Budget presents an opportunity to balance fiscal discipline with sustained economic growth. By addressing structural cost pressures, modernizing subsidy delivery, and maintaining targeted public investment, the government can navigate short-term global risks while supporting long-term economic development. Implementing these strategic actions will help strengthen India's economic foundation, expand domestic manufacturing, and build a resilient framework for sustainable growth.

US Economic Policy

 

US STRATEGIC POLICY ASSESSMENT:
MONETARY DYNAMICS, FISCAL FRICTION, AND ECONOMIC REALIGNMENT

A Comprehensive Evaluation of U.S. Macroeconomic Policy, Divergent Governance Frameworks, and Strategic Interventions

R Kannan

The annual Federal Reserve Bank of Kansas City Economic Symposium in Jackson Hole highlighted a pivotal shift in U.S. macroeconomic policy. Federal Reserve Chair Kevin Warsh delivered a hawkish address prioritizing price stability, signaling the end of extensive 'forward guidance,' and acknowledging structural supply-side transformations driven by Artificial Intelligence (AI). Concurrently, a pronounced policy divergence has opened between Federal Reserve monetary policy and Treasury Department debt management under Treasury Secretary Scott Bessent.

As the Fed maintains elevated policy rates (3.50%–3.75%) to control persistent core inflation (Core PCE holding at 3.3%), the Treasury is utilizing debt-management interventions—such as accelerated long-dated buybacks—to curb long-term borrowing yields. This tension underscores structural imbalances in the domestic economy: capital-intensive, high-margin sectors benefit from technology tailwinds, while interest-sensitive sectors—including housing, small-business capital expenditure, and lower-to-middle-income households—face ongoing cost pressures.

This report evaluates the emerging policy issues from Chair Warsh’s address, details the institutional tension between the Federal Reserve and Treasury Department, assesses the segmental economic impact across society, and proposes ten targeted structural and regulatory actions to support broad-based economic growth.

Part 1: Key Issues Arising from Kevin Warsh’s Jackson Hole Address

Chair Kevin Warsh’s debut Jackson Hole address marked a clear shift in the Federal Reserve's strategic posture. His message combined monetary hawkishness with systemic structural reform, establishing three core policy directions:

FEDERAL RESERVE STRATEGIC SHIFT SUMMARY 1. Hawkish Price Focus: Re-anchoring the 2% explicit PCE target and prioritizing price stability over short-term labor smoothing. 2. Demise of Forward Guidance: Eliminating preemptive rate-path signaling to restore unfiltered market price discovery. 3. Pro-Growth Productivity: Acknowledging AI and technology supply-side expansion while maintaining a firm baseline against short-term inflation overshoots.

 

1. Re-Anchoring the Inflation Mandate & 'Quieter Fed' Doctrine

Chair Warsh explicitly prioritized the price stability mandate over short-term labor market smoothing. Noting that core PCE inflation remains elevated at 3.3%—with over 50% of the basket expanding above a 3% annual rate—Warsh stated that responsibility for prolonged inflation rests squarely with the central bank. Rejecting the premise that current interest rates are overly restrictive, he signaled that if disinflation stalls, the Federal Reserve remains fully prepared to tighten policy further.

2. Elimination of Preemptive Forward Guidance

In a notable break from post-2008 central banking practices, Warsh announced an end to detailed 'forward guidance'. Characterizing excessive central bank communication as a crutch that distorts market pricing and creates echo chambers, he advocated for a 'quieter Fed'. Under this approach, the central bank will no longer signal future rate paths, requiring market participants to independently evaluate economic data.

3. Supply-Side Optimism vs. Monetary Realities

Warsh highlighted the potential of Artificial Intelligence and technology infrastructure investment as a historic productivity catalyst. However, he emphasized that long-term supply-side gains cannot excuse short-term inflation overshoots. While technology may eventually lower marginal production costs, immediate demand for infrastructure capital is intensifying credit competition and contributing to higher neutral interest rates (r*).

Part 2: Monetary-Fiscal Divergence: The Warsh vs. Bessent Paradox

A central challenge in U.S. macroeconomic policy is the strategic divergence between Federal Reserve Chair Kevin Warsh and Treasury Secretary Scott Bessent. While both acknowledge high sovereign debt loads, their operational mechanisms present contrasting approaches to managing money supply, debt service costs, and yield curve dynamics.

Strategic Policy Divergence Framework

Policy Dimension	Kevin Warsh (Federal Reserve)	Scott Bessent (Department of Treasury)
Primary Objective	Restore price stability to 2%; re-anchor inflation expectations.	Prevent fiscal drag; limit long-term borrowing costs; sustain liquidity.
Operational Mechanism	Short-term Federal Funds Rate; un-signaled rate adjustments.	Debt issuance mix (Short T-Bills vs. Long Bonds); debt buybacks.
Yield Curve Stance	Allow market forces to price term risk freely without intervention.	Intervene via long-end buybacks to prevent 10-year yields from exceeding 5%.
Diagnosis of High Yields	Elevated inflation risk, solid baseline growth, and heavy capital demand.	Market inefficiency, excess term premium, and supply-demand imbalances.

 

Systemic Issues Arising from the Policy Divergence

1. Counteracting Policy Signals

When the Federal Reserve maintains a restrictive rate posture to dampen demand, while the Treasury actively buys back long-dated bonds to suppress long-term interest rates, monetary and fiscal signals pull in opposite directions. Treasury market intervention softens the monetary transmission mechanism, which may require the Fed to keep short-term rates higher for longer.

2. Fiscal Dominance and Central Bank Independence

Treasury interventions aimed at capping yield curve escalation risk creating a perception of indirect yield curve control. If the market senses that Treasury actions are designed to insulate government spending from central bank interest rate policy, the credibility of the Fed's inflation target can erode, driving long-term term premiums higher.

3. Treasury Bill Concentration and Refinancing Risk

To avoid lock-in of elevated long-term rates, the Treasury has shifted issuance heavily toward short-term Treasury Bills. This shortens the average maturity of U.S. sovereign debt, increasing government sensitivity to short-term Fed policy rate moves. As a result, every 50-basis-point hold by the Fed translates directly into higher federal net interest expenses.

Part 3: Current Macroeconomic Conditions & Segmental Impact Analysis

The macroeconomic landscape presents a dual economy: high-margin tech sectors and upper-income asset holders remain resilient, while debt-reliant small enterprises and lower-income consumers experience economic strain.

Segmental Impact Assessment

·        1. Lower- and Middle-Income Consumers: Subprime credit card and auto-loan delinquencies are at multi-year highs. Annual percentage rates (APRs) on consumer debt exceed 21%, absorbing discretionary income. Cumulative inflation over the past five years continues to weigh on real wage gains, particularly for essential items like housing, energy, and food.

·        2. Housing Market & First-Time Homebuyers: Mortgage rates ranging between 6.5% and 7.2%—combined with elevated home prices—have reduced housing affordability to four-decade lows. Existing homeowners with locked-in 3% mortgage rates remain hesitant to sell, restricting inventory supply, keeping prices elevated, and limiting residential mobility.

·        3. Small & Mid-Sized Enterprises (SMEs): Unlike mega-cap firms that secured long-term corporate debt at lower historic rates, SMEs rely on variable-rate bank debt or short-term credit lines, leading to higher interest expenses. Rising input costs alongside higher borrowing rates are limiting capital spending and employment expansion among regional businesses.

·        4. Large Enterprise & Tech Infrastructure: Hyperscalers and technology leaders continue to deploy large-scale capital into AI infrastructure. Strong balance sheets allow these firms to fund growth through internal cash flows, bypassing broader debt market pressures.

·        5. Sovereign Debt & Regional Banking System: Regional banks holding fixed-rate assets face ongoing net interest margin compression and unrealized paper losses. Concurrently, gross federal debt service costs now exceed $1 trillion annually, crowding out non-discretionary federal programs.

Part 4: Strategic Action Plan: 10 Policy Interventions for Sustainable Growth

To navigate structural inflation, resolve monetary-fiscal tensions, and support broad-based economic mobility, policymakers should evaluate ten targeted actions across fiscal, monetary, regulatory, and credit frameworks.

I. Monetary and Fiscal Policy Realignment

1. Formalize a Joint Treasury-Fed Liquidity Accord: Establish a transparent framework clarifying the boundaries between Fed monetary policy and Treasury market liquidity operations. Treasury buybacks should focus exclusively on market function and market-making liquidity, rather than targeting specific yield levels. This reduces market uncertainty regarding fiscal dominance, lowers the yield term premium, and maintains Federal Reserve independence in price discovery.

2. Transition Sovereign Debt Issuance Toward Mid-Duration Debt: Shift the U.S. Debt Management Advisory Committee (TBAC) guidance away from short-term T-bills back toward 3- to 7-year Treasury notes. This locks in sovereign financing obligations, mitigates immediate interest rate rollover risks, and reduces government sensitivity to short-term rate holds by the Fed.

II. Housing and Real Estate Interventions

3. Establish Mortgage Equity Portability and Subsidized Buydowns: Direct the Federal Housing Finance Agency (FHFA) to create frameworks allowing homeowners to transfer existing low-rate mortgage accounts to replacement properties, paired with temporary interest rate buydowns for first-time buyers. This unlocks residential housing supply, increases labor mobility, and lowers entry barriers for younger homebuyers.

4. Implement Targeted Tax Credits for Starter-Home Construction: Pass federal tax incentives aimed at residential developers building single-family homes under 1,800 square feet. This expands housing entry-level supply, curbs price appreciation driven by inventory shortages, and supports middle-class wealth creation.

III. Small Business and Household Credit Relief

5. Expand SBA Interest-Rate Capping Guarantees: Scale SBA 7(a) and 504 loan guarantee programs while instituting a temporary cap on variable-rate credit premiums charged by participating lenders. This protects small businesses from sharp rate fluctuations, lowers debt service burdens, and supports capital investment across regional trade sectors.

6. Institute Credit Card APR Structure Reforms: Enact federal guidelines linking credit card APR ceilings directly to default rates, while eliminating compounding penalty fee structures for consumers maintaining active repayment plans. This provides relief to squeezed middle- and lower-income households, lowering systemic default risks and restoring discretionary purchasing power.

IV. Banking Sector and Financial Stability

7. Modernize Regulatory Capital Rules for Community Banks: Adjust Federal Reserve and FDIC capital requirements under the Scale-Based Regulation regime, granting community banks relief from hold-to-maturity capital penalties on sovereign bonds. This frees up capital reserves, allowing community financial institutions to increase commercial lending to local borrowers.

V. Structural Supply-Side and Productivity Enhancements

8. Fast-Track Energy Infrastructure for AI Data Centers: Institute federal permitting for advanced nuclear, natural gas, and grid connection projects supporting technology facilities. Require tech operators to co-invest in local grid expansions. This supports productivity gains from AI investment while preventing commercial energy demand from driving up household utility bills.

9. Execute Federal Permitting Reform for Strategic Logistics and Minerals: Streamline National Environmental Policy Act (NEPA) timelines to accelerate construction of transport, freight, and critical mineral projects. This reduces supply-chain bottlenecks, lowers structural input costs for manufacturing, and supports disinflation without suppressing economic growth.

10. Establish National Workforce Adaptation Tax Credits: Offer tax credits to enterprises investing in technical training programs for workers vulnerable to automation or structural economic adjustments. This eases labor market transitions, supports real wage growth, and ensures productivity advances benefit a broader segment of the workforce.

 Strategic Policy Matrix

Intervention Area	Primary Action	Target Beneficiary	Macroeconomic Outcome
Fiscal / Monetary	Joint Accord & Yield Rule	Broad Financial Markets	Lower Term Premium; Restored Policy Clarity
Sovereign Debt	Rebalance Issuance Maturities	U.S. Federal Reserve / Taxpayers	Mitigated Debt Rollover & Refinancing Risk
Housing Market	Portable Mortgages & Tax Credits	First-Time Buyers & Young Families	Unlocked Supply; Improved Housing Affordability
Consumer Credit	Reform Fee & APR Caps	Lower-to-Middle Income Households	Reduced Consumer Defaults; Stabilized Demand
Enterprise / SME	SBA Rate Cap Guarantees	Small Businesses & Employers	Sustained Regional Investment & Hiring
Banking System	Community Bank Capital Relief	Regional Financial Institutions	Restored Local Credit Flow & Commercial Lending
Technology / Supply	Grid & Energy Expansion	Tech Ecosystem & Utility Ratepayers	Disinflationary Productivity Expansion
Workforce	Reskilling Tax Incentives	Frontline Workers & Displaced Labor	Broad-based Wage Growth & Income Mobility

 

Conclusion

The policy landscape outlined at Jackson Hole signals a transition away from post-2008 central banking playbooks. Chair Kevin Warsh's focus on price stability and market-driven price discovery—combined with Secretary Scott Bessent’s debt-management interventions—requires coordination between monetary and fiscal authorities.

While capital-intensive tech sectors benefit from structural productivity trends, interest-sensitive segments of society continue to face pressures from elevated borrowing costs. Implementing the ten structural actions outlined in this report can help address monetary-fiscal frictions, ease credit constraints on households and small businesses, and support durable, long-term economic growth.