Tuesday, February 3, 2026




Union Budget: At a Glance
The pace of revenue growth has slowed down, according to the Budget Report.

Union Budget



Updated on:
03 February 2026, 4:41 am


M.R. Sivaraman

Every budget has tried to take the Indian economy forward on the path of progress. The budget for the coming financial year (2026-27), which was tabled in Parliament on Sunday (Feb. 1), has very unique features. Nirmala Sitharaman is the only woman Finance Minister to present the Union Budget nine times in a row.

In order to stabilise the macroeconomy, another budget has been presented in an attempt to reduce the fiscal deficit of the country. This is the third time that the government's capital expenditure has been increased to Rs 17.1 lakh crore. This was Rs. 14.03 lakh crore in the Revised Estimates for the current financial year. This increase in capital expenditure will sustain the growth momentum.

Next, the Government of India has taken steps to support new technology sectors like Biopharmaceuticals, Artificial Intelligence etc. through the Budget. Fifth, the Budget has made a number of procedural changes for taxpayer convenience.


However, the pace of revenue growth has slowed down, according to the budget statement. This is due to the impact of major tax concessions in direct and indirect taxes. The slowdown in revenue expenditure seems to have slowed down due to the slowdown in tax revenues.

For example, the central government has postponed the announcement of a hike in dearness allowance for central government employees from January 1 this year.

Suh measures will lead to low inflation and stabilisation of the economy with a reasonable growth rate

It is a matter of regret that a large amount of funds are going from the central government to pay interest on lans; That is, 50 per cent of the tax revenue swallows up the interest on the loan. The net tax revenue of the central government in the next financial year (2026-27) is estimated at Rs 28.66 lakh crore; Out of this, Rs 14.09 lakh crore will have to be paid as interest on the loan.

At the same time, the undesirable consequence of this is that the interest money will go to corporates and billionaires who want to borrow from the government. This is a blatant robbery. Thus, 50 per cent of the taxes paid by millions of Indians go to big corporations and billionaires. It also increases the inequality in people's incomes.

The new labour laws will certainly pave the way for workers to get extra money in the form of higher gratuity and wages. At the same time, the central government should fix a minimum wage for individuals to keep them above the poverty line and to keep them reasonably comfortable. The private sector is likely to argue that this will erode India's advantage over its competitors in the business sector.

Those who say that the central government is not paying attention to the continuous depreciation of the Indian rupee against the US dollar may be viewed with suspicion. However, the rupee has fallen by more than 91 rupees against the dollar, putting a huge burden on domestic companies to borrow from abroad. This will affect the companies and the revenue generated by them to the government.

At the same time, India's foreign exchange reserves are at an all-time high of $706 billion (about Rs 65 lakh crore). The Reserve Bank of India's (RBI) policy is to hold such a large amount of foreign exchange.

Billions of dollars leaving India due to the exodus of foreign investors and substantial capital outflows due to investments by Indian companies abroad seem to have had little impact on foreign exchange reserves. This has given an opportunity to our exporters to increase exports to different countries and also to compete in markets in those countries. This positive trend has been made possible by the depreciation of the rupee.

Textiles, gems, jewellery and leather goods have been hit hard by US President Donald Trump's imposition of tariffs on Indian goods. While it has been said that the tax will have a severe impact on India, the impact appears to be minimal.

In the budget, it was expected that the unemployed would be given financial assistance through the ESI. However, no steps have been taken to increase exports or to expedite free trade agreements with other countries as was done with the UK and the EU.

Several important announcements have been made in the Budget. Huge investments have been made in fast growing sectors like bio-pharmaceuticals and semiconductors. Increase in funds for manufacturing of electronic components, setting up of routes for rare earth mining in Tamil Nadu, Kerala, Odisha and Andhra Pradesh, setting up of special chemical parks, augmentation of infrastructure projects for manufacturers, various schemes for the textile sector are welcome.

Apart from this, 7 high-speed rail lines will also be constructed. This shows that these lofty goals of the government require a large scale of primary and primary level work.

Rs 10,000 crore has been earmarked for the Small and Medium Enterprises Development Fund. In addition, Rs 2,000 crore is being provided for the development of micro enterprises. But the question for MSMEs is how much they will be beneficial in practice. Micro, Small and Medium Enterprises (MSMEs) say that they are facing a lot of problems in the day-to-day operations of their companies.

Importantly, they point to delays in getting money for supplies, lengthy procedures for availing loans, and difficulties in accessing loans even under the simplified loan scheme of Mudra Yojana. They also complain that they are being harassed by the tax department. These administrative problems should be resolved by the state level authorities. This requires administrative reforms.

A number of procedural changes have been proposed in the Income Tax Act. It is surprising that these changes have been announced as the new Income Tax Act will come into force on April 1, 2026. Critics say the government is indirectly earning thousands of crores of rupees from the increase in the Stock Transaction Tax (STD).

With the removal of the Minimum Alternate Tax (MAT) under the Income Tax Act, the difficulties in calculation have been removed. The tax rate for new companies has been reduced from 15 per cent to 14 per cent. However, this does not apply to companies falling at the 22 per cent tax rate. This is also considered as a revenue generating activity. However, the government may have been open about the impact of the changes in direct and indirect taxes on the government's revenues.

Those who closely monitor the Budget will also take note of the slow pace in the implementation of the announcements made in the Budget after the presentation of the Budget. This is due to procedural complications due to multi-ministerial involvement in implementation of budget announcements.

Lastly, the Union Government's budget has always been about continuous progress. We have to bring about fiscal stability and reform and maintain the momentum of capital expenditure. Every year, new announcements create hope and anticipation, but delays in implementing them slow down job creation and ultimately economic growth.

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நடுப்பக்கக் கட்டுரைகள் Union Budget: At a Glance The pace of revenue growth has slowed down, according to the Budget Report. Union Budget தி...

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