Union Budget 2026Sunil Bhardwaj
sunil.tbsju@gmail.com
The Union Budget 2026-27 arrives at a moment of heightened global uncertainty, marked by geopolitical tensions, financial market volatility, and a visible retreat from free trade. In such a climate, Finance Minister Nirmala Sitharaman’s ninth consecutive budget sends a clear signal: India will not be derailed by global headwinds. Instead, it will invest, reform, and consolidate its economic strengths while safeguarding macroeconomic and fiscal stability. In a globalized world, prolonged market corrections and geopolitical tensions threaten supply chains and global growth, intensifying debates around inflation, currency management, and India’s attractiveness as an investment destination. The increasing use of tariffs, export controls, and licensing regimes by major economies such as the United States and China signals a fragmentation of the global free-trade ecosystem. It is within this challenging context that the Budget seeks to leverage India’s demographic dividend – Yuva Shakti – guided by three national duties: accelerating growth through productivity and competitiveness, building human and institutional capacity, and ensuring inclusive development under the principle of Sabka Saath, Sabka Vikas.
The Union Budget 2026-27 stands out as a statement of confidence – confidence in India’s growth story, fiscal discipline, and the Prime Minister’s long-term vision of building a Viksit Bharat by 2047. The government’s continued commitment to infrastructure-led growth remains the Budget’s strongest pillar. Capital expenditure has risen steadily from 10.1% of total expenditure in FY2014-15 to 17.7% in FY2025-26, reaching a record Rs 12.2 lakh crore in FY2026-27. The message is unequivocal: India will build its way into prosperity. High-speed rail corridors, freight expansion, urban economic zones, and logistics modernization are not isolated projects but components of a strategic transformation of productive capacity. These investments generate employment in the short term and competitiveness in the long term, positioning India as a global manufacturing and services hub.
On the reform front, the Budget advances efforts to simplify compliance, attract global capital, and nurture sunrise industries. Initiatives such as the Biopharma Shakti Mission, India Semiconductor Mission 2.0, Rare Earth Corridors, and chemical parks through a competitive challenge route demonstrate forward-looking industrial policy. With the unemployment rate estimated at 4.8% by the Ministry of Statistics and Programme Implementation, the need to strengthen manufacturing, capital goods, and labor-intensive sectors remains urgent. Policy support for high-tech tool manufacturing, electronics components, container manufacturing, mega textile parks, and the rejuvenation of legacy industries signals a comprehensive approach to industrial revival. The creation of champion MSMEs, a dedicated SME Growth Fund of Rs 10,000 crore, and the Self-Reliant India Fund of Rs 2,000 crore could prove transformative. Investments in freight corridors, new national waterways, coastal cargo promotion, and high-speed rail promise to reduce logistics costs and enhance competitiveness.
Defense spending also reflects evolving strategic realities. With the Union Budget allocating a record Rs 7.85 lakh crore to defense – a 15% increase – the focus is on modernization and self-reliance. Capital outlays for defense procurement, naval expansion, indigenous manufacturing, and research aim to strengthen preparedness while promoting domestic defense production at global levels. Fiscal prudence remains a cornerstone of the Budget. The reduction of the fiscal deficit to 4.3% of GDP and a debt-to-GDP ratio of 55.6% signals responsible stewardship of public finances. While external risks such as a widening current account deficit and elevated global interest rates warrant vigilance, India’s foreign exchange reserves of approximately $690 billion provide a substantial buffer. At a time when many advanced economies are struggling with unsustainable debt, India is pursuing consolidation without sacrificing growth – a balance that reassures investors and enhances macroeconomic credibility.
India has now emerged as the world’s fourth-largest economy and is projected to become the third-largest by 2028 if current momentum continues. Even amid global headwinds, growth is projected at 6.8%, with potential acceleration toward 7.4% under stable conditions, according to the Chief Economic Adviser. Global institutions predict a strong and optimistic medium-term to long-term outlook, reinforcing India’s appeal as a global investment destination.
In essence, Budget 2026-27 is not about short-term populism; it is ambitious, strategic, and forward-looking. By simultaneously prioritizing capital formation, human development, and fiscal credibility, the government presents a coherent growth model rather than a collection of disconnected announcements. As the global economy fragments and supply chains realign, India positions itself not as a passive observer but as an assertive architect of its future. The Budget signals a nation planning not merely for the next fiscal year but for the next generation. If execution matches intent – and administrative capacity has shown steady improvement – this Budget may be remembered as another decisive milestone in India’s journey toward ‘Viksit Bharat by 2047’.
(The author is a MLA Ramnagar)
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