Finance Minister Nirmala Sitharaman will present the Union Budget for 2026–27 in Parliament today, marking a historic occasion as the Budget is being delivered on a Sunday for the first time in independent India’s history.
This will be Sitharaman’s ninth consecutive Budget, making her the first woman finance minister to achieve this milestone. It will also be the 15th Budget of the Narendra Modi-led government and the second full Budget since the National Democratic Alliance (NDA) returned to power for a third consecutive term in 2024.
The FY27 Budget comes at a time of heightened complexity for the Indian economy. While domestic demand has remained resilient and inflation has moderated from recent peaks, the global economic environment continues to remain uncertain.
Geopolitical tensions, volatile commodity prices, uneven monetary easing by major central banks, and rising trade fragmentation continue to weigh on the outlook. Adding to the challenge are the punitive 50 per cent tariffs imposed by US President Donald Trump on Indian goods, which have unsettled financial markets, triggered sustained foreign investor outflows, and contributed to the rupee touching record lows.
So far, sweeping income tax and GST cuts, increased infrastructure spending, and interest rate reductions by the Reserve Bank of India have helped cushion the economy against external shocks. However, these tax cuts have also impacted government revenues, narrowing the fiscal space available to support growth in the new Budget.
Economists expect the Budget to prioritise defence, infrastructure, capital expenditure, power, and affordable housing, while carefully balancing social welfare commitments with fiscal prudence. The emphasis, they say, will be on sustaining growth momentum without diluting the government’s commitment to fiscal consolidation.
The government has steadily reduced the fiscal deficit from the Covid-induced peak of 9.2 per cent to an estimated 4.4 per cent in FY26, and experts believe this trajectory of fiscal discipline will largely be maintained, with no major deviation anticipated.
Unlike the FY26 Budget, which placed a stronger emphasis on boosting middle-class consumption through tax relief, the FY27 Budget’s consumption push is expected to be more targeted.
Overall, economists believe the Budget is likely to strike a careful balance between supporting economic growth and maintaining fiscal discipline, while addressing near-term challenges arising from an unprecedented phase of global geopolitical and economic uncertainty.
— IANS
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