Dr Noour Ali Zehgeer
I have always felt that the Budget is a source of hope for 1.26 billion people. Nearly 80 percent may not understand the minute details of this event and document, yet they still believe something good is going to happen in their lives. People connect their unfulfilled dreams with the New Year’s budget, as they believe an elected government is always pro-people. This myth has been broken over the last 10 years, as people have come to understand that elected governments can be pro-rich and supportive of capitalism.
The Union Budget 2026, presented in Parliament on February 1, 2026, once again demonstrated the government’s narrow walk between economic discipline and public aspirations. Finance Minister Nirmala Sitharaman began her speech with a vision of stability, continuity, and long-term growth. There were no unexpected populist announcements; instead, the budget adopted a realistic approach. The fiscal deficit was kept at 4.4 percent of gross domestic product (GDP) for the financial year 2026, below the previously set target of 4.5 percent—setting a strong example of fiscal discipline. Capital expenditure was increased from ₹11.2 lakh crore last year to ₹12.5 lakh crore, representing a rise of nearly 12 percent, focused on infrastructure, urban development projects, and the digital-technology sector. A target of raising ₹10 lakh crore has been set under the asset monetisation scheme to encourage private-sector investment.
For the common man, a budget is simply a money plan that decides how income is used wisely so that present needs are met while the future is secured.
The Indian economy achieved 6.8 percent growth in the last fiscal year, but challenges such as the global economic slowdown, U.S.–China trade tensions, and domestic inflation persist. The budget tightly controlled the fiscal deficit at 4.4 percent, while the effective revenue deficit was limited to ₹96,654 crore—just 0.3 percent of GDP. A provision of ₹12.5 lakh crore for capital expenditure will give fresh impetus to the national infrastructure pipeline. The target of adding 50,000 kilometres of highways and an allocation of ₹2.5 lakh crore for railway electrification and modernisation demonstrate a commitment to laying the foundation for the future. States will be provided ₹1.5 lakh crore in 50-year interest-free loans, strengthening the federal structure. Measures such as tax exemptions, a single-window system, and faster approval processes have been introduced to promote the public–private partnership (PPP) model. The government has sent a clear message: investors, come—we are fully prepared. But the big question is whether these huge investments will create jobs in rural and semi-urban areas or remain confined to the glitz of the metropolises.
The middle class, which contributes approximately 40 percent to the country’s GDP, received substantial tax relief in this budget. The standard deduction in the old tax regime was doubled from ₹50,000 to ₹1 lakh, while additional relief was extended to senior citizens. The new tax regime simplified slabs, including zero tax on income up to ₹5 lakh. TCS on education loans was removed (up to ₹10 lakh), while the rent-TDS threshold was raised from ₹2.4 lakh to ₹6 lakh. Tax relief was granted on two self-occupied residential properties, and the deadline for filing income-tax returns was extended from two years to four years. The promise to simplify the tax code from 819 sections to 536 is commendable. These steps aim to transform taxpayers from mere sources of revenue into trusted partners. However, compliance processes must be simplified further at the ground level; otherwise, these relief measures may remain confined to paperwork.
The budget also focused on agriculture, which still accounts for 18 percent of GDP and supports 65 percent of the rural population. The Pradhan Mantri Dhan-Dhanya Yojana was expanded to 100 districts, encouraging crop diversification and improving irrigation and storage capacity. PM-Kisan Samman Nidhi was enhanced, and the Kisan Credit Card limit was raised. Economic zones were declared in the Andaman and Lakshadweep Islands for fisheries development, along with provisions to strengthen fruit and vegetable supply chains. The MNREGA allocation was increased, and a rural credit-scoring system will facilitate loans to self-help groups (SHGs). The leather, footwear, and toy industries are projected to generate 2.2 million new jobs. These provisions could boost the rural economy, but the real test will be whether schemes move beyond paper and reach farms and markets. Small and marginal farmers must benefit—not only large landholders.
Prioritising women’s empowerment, the Lakshmi Vandana Yojana has been expanded, and guarantees on self-employment loans of up to ₹20 lakh have been removed. Home-based work for urban women will benefit from tax exemptions. A special provision of ₹10,000 crore for Panchayati Raj institutions will promote genuine leadership in states such as Haryana, where women’s reservation stands at 50 percent. These steps are significant toward gender equality, but effective implementation at the Panchayat level will be essential.
Loans and free 5-kg ration to 80 crore people paint a different picture of India.
To empower nearly 60 percent of the country’s population under 35, more than ₹1.35 lakh crore has been allocated for education, including the establishment of 50 new IITs and medical colleges. ₹2 lakh crore has been earmarked for the Skill India programme, while an internship scheme will provide monthly stipends of ₹10,000 to 50 million youth. Support for micro, small, and medium enterprises (MSMEs) and an employment-focused development model underline the intent to bring the unemployment rate below 8 percent. An allocation of ₹50,000 crore to the Start-up India Fund will encourage youth entrepreneurship. Yet the question remains: will these efforts translate into real jobs, or will young people continue wandering in search of opportunities?
In technology and innovation, the budget announced an artificial-intelligence centre, a revenue target of ₹2 lakh crore from the 5G spectrum auction, and ₹1 lakh crore for Digital India. ₹5 lakh crore has been earmarked for clean-energy projects, including solar parks and green-hydrogen production. One-hundred-percent insurance coverage for foreign direct investment (FDI) and the Public Trust Bill 2.0—aimed at repealing or simplifying over 100 outdated laws—signal a reform-oriented push. These measures align with the goal of making India a developed nation by 2047, but the digital divide must be bridged so rural areas are not left behind.
The challenges, however, remain formidable: containing inflation at around 5.5 percent, curbing food prices, strengthening border security with a defence budget of ₹6.5 lakh crore, and allocating ₹1 lakh crore for environmental protection, export promotion, and innovation. The budget has set the direction clearly—now the speed and integrity of implementation will determine its success.
Special packages for trouble-torn states again sound hollow when the Government of India has struggled to clear GST payments to states for the last 12 months. Where will the money come from, and how will programmes that truly benefit the common man be funded and implemented?
Budget 2026 presents a realistic roadmap across ten key areas, focusing on the poor, farmers, youth, and women. It raises hopes while provoking questions. The real test will be implementation. The direction is clear—now it is time to demonstrate.
