The Union Budget 2026–27 followed a predictable pattern as it was the 9th Budget by the same Finance Minister under the BJP-led government at the Centre. The format is to give out micro details about various schemes and packages to please the concerned stakeholders, avoid comparisons with best in class numbers and circumvent painting a macro picture of the economy. The income and expenses blueprint by the government was showcased as an epitome of stability, discipline, and growth.
The economy is doing excellent with the government able to manage fiscal deficit, infrastructure expansion, and long-term resilience with great dexterity and far-sightedness. Headline numbers appear reassuring with capital expenditure at ₹12.2 lakh crore and fiscal deficit contained at around 4.4% of GDP. The government highlights this as evidence of prudence.
But, wait! This is the surface. Scratch it a little and you realise, things are not that hunky-dory as it is made out to be by the government and their pliant media. The deficit has been managed not by mobilising progressive revenues, but by cutting down on essential services. Revenue receipts fell short by nearly ₹80,000 crores, while spending on drinking water, sanitation, pollution control, and other vital areas was curtailed.
Who Shoulders Whose Burden?
If you look at from where the money comes and goes, one is reminded of the title song of the 1974 Marathi movie ‘Saamna’ – “KunachyaKhandyavarKunacheOze” (Who Shoulders Whose Burden?) In 2026–27, income tax from individuals is estimated at ₹14.66 lakh crore, accounting for 21% of total revenue. Meanwhile corporation tax stands lower at ₹12.31 lakh crore, or 18%. This trend started in 2019 with a sharp cut in corporate tax wherein rates were reduced from 30% to 22% (and 15% for new manufacturers).
What was the logic for this cut. Did industry deliver commensurate gains in investment or employment? Meanwhile, GST revenues (among the most regressive forms of taxation) have more than doubled in five years. This has placed a disproportionate burden on ordinary households and suppressed consumption demand. What would a pro-people government do if it is starved for revenue? It would strengthen progressive direct taxation (tax the rich more than the less rich) and reduce reliance on indirect taxes. However, the government seems to practise “kuch” ka saath (support the elite); rather than “sab ka saath” (help all).
Live within Your Means
There is another axiom, “Aamdaniathanni, kharcharupaiya–nateeja than-than Gopal” (if income is 50 paise and expenses are a rupee, it will lead to penury). If we look at our borrowing and liabilities, they make up 24% of our income. The debt to GDP ratio (the government’s debt relative to the economy) is 56%. We are achieving growth but it is coming at a great cost. Interest payment is 20% of our entire expense. Excessive dependence on interest-based debt not only constrains future fiscal space but also raises serious moral concerns, as it diverts public resources away from social welfare towards servicing creditors, thereby reducing our spending on health, education and poverty alleviation. Defence spending is 11%.
In short, analogically speaking, almost a third of our income is paid to “sahukar” and “daroga”. This entire equation calls for a complete rethink. But, this policy is part of a global trend established by the neo-liberal world order that wants countries to keep borrowing from their banks and engage in arms-driven geopolitics. This serves the interests of their lending and armament industry, while nations remain caught in a debt trap and a state of permanent hostility.
Jobless Growth, Diminishing Social Sector
The budget’s focus on capital-intensive growth might raise aggregate output, but its employment potential is limited. That is because a majority of workers in our country are in the informal sector where they are low-paid and do not have job security. Perhaps the most damning evidence of the government putting capital first and people later is the utilisation of allocations to the social sector.
Revised estimates for 2025–26 show that for 17 out of 20 major social sector schemes, the Union government spent significantly less than what it had promised in the Budget Estimates. Only two schemes PM Garib Kalyan Anna Yojana and MGNREGA, saw higher revised spending, and even here the picture is distorted, as MGNREGA has effectively been replaced by the VB G-RAM-G scheme. This new scheme has been criticised for replacing universality with discretionary implementation, allowing the Union government to “notify” areas and thereby reducing accountability, coverage, and workers’ security.
The Jal Jeevan Mission is another striking example. Against a promised ₹67,000 crore, actual spending was barely ₹17,000 crores. Housing schemes under PMAY, urban and rural, also saw massive shortfalls, running into tens of thousands of crores. Many experts have pointed out that whatever increase India has seen in social spending over the years has been driven primarily by state governments. The Central government’s transfers have either stagnated or declined.
Marginalisation of Minorities
The Ministry of Minority Affairs has been allocated ₹3,400 crores in 2026–27. While this is higher than last year’s revised estimate, it remains modest in a budget exceeding ₹53 lakh crores. More worrying is the utilisation of funds for religious minorities. In 2023–24, only 5% of allocated funds were actually spent, largely because key scholarship schemes were left unapproved beyond 2021–22.
Thus, allocations became paper promises, leaving students and families unsupported despite real need. Education scholarships including post-matric and merit-cum-means schemes remain grossly inadequate, while skill and livelihood programmes for minorities receive marginal funding. In a country where the Sachar Committee and subsequent studies have documented persistent Muslim disadvantage in education, employment, and credit access, this neglect is both economically irrational and morally indefensible.
Absent Debate
It is emblematic of our times that debate and discussion on improving our economy and pointing out the most fundamental errors in our approach towards setting our economic priorities is conspicuous by its absence. The focus on size and speed of growth of the economy seems to be the only way to judge how well we are doing. Other ways to measure our economic development such as the UNDP’s HDI (Human Development Index which shows health outcomes, education attainment, and per-capita income) where we rank a dismal 130 of 193 countries are conveniently forgotten.
True democracy flourishes when conventional and failed ideas are challenged with better alternatives. Or else, as ancient Greek playwright Euripides wrote in his play Orestes, “When one with honeyed words but evil mind persuades the mob, great woes befall the state.”