States' devolution at 41%; South's share up

The 16th Finance Commission (16th FC) has recommended that the Centre retain the 41% share of tax devolution to States as has been in force since 2021. "The government has accepted the recommendation of the Commission to retain the vertical share of devolution at 41%,". 

Capex scale-up

The Budget announced several customs duty reductions aimed at boosting exports of marine, leather, and textile products, and speeding up India's energy transition. It also announced multiple infrastructure projects. Notably, the Budget did not include any major direct tax rate relaxations, either for individuals or corporations. The Budget also set the Centre's capital expenditure target at ₹12.2 lakh crore in 2026-27, higher than the ₹10.9 lakh crore as per the Revised Estimates of 2025-26, as well as the ₹11.2 lakh crore initially budgeted that year. 

₹10,000-crore dosage for biopharma

Biopharma SHAKTI aims at facilitating domestic production of biologics and biosimilars; three new National Institutes of Pharmaceutical Education and Research to be set up; Central Drugs Standard Control Organisation to be strengthened according to global standards. 

Budget ignores unemployment, social security: trade unions

The allocation for the Union Labour Ministry remained unchanged at around ₹32,666 crore as in the last Budget. Trade unions alleged that the government neglect-ed the employment sector and that there were no provisions to increase job opportunities and ensure social security of workers. 

New rural jobs scheme gets over ₹95,000 crore

The budget for rural employment schemes saw a 43% hike, with allocation of ₹95,692.31 crore for the new scheme under the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025 and ₹30,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). 

Post Sindoor, major boost for defence

With the highest-ever outlay of ₹7.85 lakh crore, Budget underlines resolve to upgrade military capabilities to global standards, with a strategic emphasis on self-reliance; capex allocation up 22% to ₹2.19 lakh crore, and 75% of it will be spent on domestic procurement.

More money and new schemes for livestock, fisheries sectors.

Union Finance Minister Nirmala Sitharaman on Sunday announced a series of schemes to strengthen the fisheries and animal husbandry sectors in the Union Budget on Sunday, with a focus on value-chain development, entrepreneur-ship and rural employment. 

Booster shot for education and skilling

Allocation for Education Ministry sees 14.21% increase to about ₹1.39 lakh crore; Budget for Samgra Shiksha scheme, Kendriya Vidyalaya Sangathan raised; Finance Minister announces five university townships and a panel to look at 'pathways from education to employment'. 

Rare earth corridors to cut China imports

The govt. will support mineral-rich Odisha, Kerala, Andhra Pradesh, and Tamil Nadu in establishing such corridors; China's dominance in rare earths stems not only from resource availability but more so from its long-standing strength in mining and research capacity. 

Semiconductor Mission 2.0 unveiled; electronics parts scheme outlay doubled

Union Finance Minister Nirmala Sitharaman on Sunday announced that the outlay for the Electronics Component Manufacturing Scheme (ECMS) would be increased from ₹22,805 crore to ₹40,000 crore. 

Seven rail corridors get green signal

Calling them 'growth connectors', the Finance Minister says the 4,000-km high-speed network planned at an outlay of ₹16 lakh cr. will link Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri. 

Debating Budget 2026 as turning point or tinkering

Budget 2026-27 needs to be read in the context of much geopolitical turmoil.

The Budget chose prudence over adventurism, and multipronged measures over Big Bang reforms

Where Budget 2025 was largely dominated by the income-tax rate and slab relaxations, Budget 2026 has done away with Big Bang measures. Instead, its scatter-shot approach, through various sectoral and is-sue-based measures, when taken together, is aimed at propelling India's growth over the medium term. Given the level of geoeconomic and geopolitical uncertainties that the Indian economy faces, this diffused approach is likely a more effective policy than targeted Big Bang announcements would be. This is not the time for further disruption. 

Budget 2026 bets big on industrial growth

The Budget has a slew of long-and short-term measures with a view to maintaining continuity over short-term policy stimuli. 

Building on a tax gamble that did not pay off

Budget 2026-27 needs to evaluated in light of this. This is going to be an uncertain year, both politically and economically. India is precariously placed between a current account surplus with the U.S. but a deficit with China. If its exports gets affected as a result of President Donald Trump's tariff war, without its imports countering the fall, the external situation for India may actually worsen. The Eco-nomic Survey at least acknowledged this possibility, although with a low probability of 10%. In a fundamentally uncertain world that we currently find ourselves in, you don't want to take refuge in probability theory. 

Pushing welfare towards the States

The arena of welfare spending has now shifted to the States, while the Centre continues to drive the agenda by legislating and setting norms. 

What does the Budget offer urban India?

The Union Budget 2026 has cut urban development allocations by 11.6%, lowering funding from ₹96,777 crore to ₹85,522 crore. This reduction raises concerns about the sustainability of essential services amid rising challenges such as mass migration, climate change and infrastructure stagnation in cities. 

Centre aiming for a 4.3% fiscal deficit for 2026-27

Moderation in the figure by only 10 basis points is primarily due to a fall in the gross tax to GDP ratio, say experts; the deficit budgeted in FY26 was 4.4%, down 40 basis points, from 4.8% in FY25