Mon, Feb 23, 2026
Budget 2026: The Full Picture
Budget 2026-27 comes at a time of global uncertainties, with tariff threats and shifting geopolitical partnerships impacting the world economy and its supply chains. The Secretariat charts not just the headline numbers, but also the hidden ones
Feb 01, 2026 · 2 min read
Finance Minister Nirmala Sitharaman presented her ninth budget based on the theme of Yuva Shakti, with a foundation of the 3 Kartavya or responsibilities of the government. The focus was on job generation, pushing manufacturing, creating a resilient supply chain for critical minerals, while ensuring energy security.
The governemnt's non-debt receipts and the total expenditure are estimated as ₹36.5 lakh crore and ₹53.5 lakh crore respectively. The Centre’s net tax receipts are estimated at ₹28.7 lakh crore.
To finance the fiscal deficit, Sitharaman said a combination of net market borrowings from dated securities and small savings instruments will be utilised. An estimated ₹11.7 lakh crore will be raised through market borrowings. However, the pace of fiscal consolidation is projected to slow with just a 10 basis points reduction between 2025-26 and 2026-27. Compared to the 40 basis point reduction in fiscal deficit from 2024-25 to 2025-26.
Direct tax structure has remained more-or-less unchanged. The new Income Tax regime will kick in from 1 April 2026. "The simplified Income Tax Rules and Forms will be notified shortly, giving adequate time to taxpayers to acquaint themselves with its requirements," she said.
The governement which aims to adhere to the fiscal consolidation exercise will have to judiciously loosen its purse strings without denting the growth story as it sets its eyes on becoming a developed nation by 2047.
As expected, defense budget has gotten a boost especially, in the wake of Operation Sindoor. Even as defence expenditure as a percentage of GDP has been going down, the allocation has been moving northwards in absolute numbers.
Spending on new and renewable energy continues to rise steadily, reflecting the government’s long-term clean energy push. While the sharp rise in coal-linked allocations has raised eyebrows in a budget framed around energy transition, the increase is largely driven by spending on coal and lignite gasification, which the government positions as a transition technology.
While the Micro, Small and Medium Enterprises (MSME) ministry’s headline allocation has grown only modestly, the budget’s support for small businesses is spread across multiple schemes and ministries, with a focus on easing compliance, improving liquidity, and enabling firms to scale.
The Budget sustains last year’s higher allocation for the textile sector, reflecting a focus on consolidation and implementation of existing schemes rather than a new spending push.
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