- Dr Nishant A.Irudayadason
Professor of Philosophy and Ethics,
Jnana-Deepa Institute of
Philosophy & Theology, Pune.
Finance Minister Nirmala Sitharaman’s record ninth budget presentation delivers a mixed bag of targeted relief and grand promises but raises critical questions about implementation capacity and fiscal sustainability. With a total expenditure of ₹53.5 lakh crore and a fiscal deficit target of 4.3% of GDP for FY27, the budget attempts to balance growth aspirations with fiscal prudence. However, beneath the headline numbers lies a more complex reality of modest tax relief, ambitious sectoral schemes, and infrastructure commitments that may strain government resources. The ₹12.2 lakh crore capital expenditure allocation, while impressive at 4.4% of GDP, represents only a 9% increase from the previous year—hardly the transformative leap needed to address India’s infrastructure deficit. More concerning is the government’s continued reliance on asset monetisation targets of ₹10 lakh crore, a strategy that has consistently underdelivered in previous years, casting doubt on the budget’s financing assumptions.
The tax relief measures, while welcome, appear more symbolic than substantive for the average taxpayer. The reduction of Tax Deducted at Source (TDS) on overseas tour packages to 2% primarily benefits affluent travellers, while the elimination of TDS on education remittances up to ₹10 lakh offers limited relief to middle-class families already struggling with rising education costs. The much-anticipated implementation of the new Income Tax Act 2025 from April 1, 2026, promises simplification but lacks concrete details about how it will reduce compliance burden or litigation. Critics argue that the government missed an opportunity to provide meaningful tax relief through slab adjustments or increased standard deductions, instead opting for peripheral changes that generate headlines but deliver minimal impact on disposable income. The extension of ITR filing to four years, while administratively convenient, does little to address the fundamental complexity of India’s tax system that continues to burden honest taxpayers.
The budget’s manufacturing focus through sector-specific schemes reveals both ambition and concerning patterns of policy proliferation. The India Semiconductor Mission 2.0, with its ₹40,000 crore outlay, builds on ISM 1.0’s mixed track record, where promised investments have been slow to materialise, and job-creation targets remain unmet. Similarly, the ₹10,000 crore Biopharma SHAKTI initiative, while addressing a strategic sector, adds to an already crowded landscape of government schemes with overlapping objectives and unclear coordination mechanisms. The Electronics Components Manufacturing Scheme’s expansion to ₹40,000 crore, despite achieving only modest results in its initial phase, raises questions about whether throwing more money at existing programs is the optimal strategy. Industry experts worry that the government’s scheme-heavy approach may create bureaucratic bottlenecks and rent-seeking opportunities rather than the streamlined business environment that manufacturers actually need.
Infrastructure development, the budget’s centrepiece, faces significant execution challenges that the government has yet to adequately address. The announcement of seven high-speed rail corridors sounds impressive, but it lacks crucial details about funding mechanisms, land acquisition strategies, and realistic timelines. India’s experience with the Mumbai-Ahmedabad bullet train project, plagued by delays and cost overruns, offers a sobering reminder of the gap between infrastructure announcements and ground reality. The proposed infrastructure risk guarantee fund, while conceptually sound, remains vague about its operational framework and risk assessment criteria. More critically, the budget fails to address the chronic issues of project clearances, environmental approvals, and centre-state coordination that have historically derailed infrastructure projects. The emphasis on connecting Tier-2 and Tier-3 cities is commendable, but without addressing these systemic bottlenecks, these corridors risk becoming expensive white elephants rather than growth catalysts.
Budget 2026 ultimately reflects the government’s preference for announcement-driven policy over structural reform. While the fiscal deficit target of 4.3% appears prudent, it relies heavily on optimistic growth assumptions and asset monetisation proceeds that may not materialise. The MSME sector’s enhanced credit limits and startup funding, though positive, cannot substitute for the fundamental reforms in labour laws, land acquisition, and regulatory simplification that businesses desperately need. The budget’s silence on agricultural distress, unemployment challenges, and income inequality suggests a disconnect between policy priorities and ground realities. As India aspires to become a developed economy by 2047, Budget 2026 offers incremental progress rather than the transformative vision required. The real test will be whether the government can move beyond the comfort zone of scheme launches to tackle the hard reforms that will determine India’s economic trajectory. Until then, this budget remains a collection of well-intentioned promises awaiting the harsh judgment of implementation reality.
