INTRODUCTION
The Union Budget 2026-27 is presented by our finance minister Nirmala Sitharaman in parliament and prepared firstly in our newly inaugurated Kartavya Bhawan. This budget comes up with a mixed sort of emotions from the public. The budget was presented as a Yuva Shakti driven budget with its key focus on Viksit Bharat, presenting the principles of action over ambivalence and people over populism. The budget pointed out three Kartavyas (duties) aiming for boosting economic growth, building public capacities, and ensuring inclusive development.
While stating these three Kartavyas, the finance minister first talked about sustaining economic growth with its main focus on enhancing productivity, competitiveness, & building resilience against current global dynamics. Secondly, it’s fulfilling aspirations with a key focus on building the capacity of youth and citizens. At last the government comes up with its motto of Sabka Saath, Sabka Vikas, highlighting the inclusiveness of all the citizens to resources & opportunities.
KEY GOVERNMENT INITIATIVES
The government in the latest Union Budget mainly focuses on seven strategic areas, which are biopharma, semiconductors, electronics, rare earths, chemicals, capital goods, and textiles. In manufacturing, the finance minister introduced Biopharma SHAKTI, a 10,000 crore outlay over 5 years to create India as a global biopharma manufacturing hub, which also includes establishing 3 new NIPERs, upgrading seven existing ones, and creating a network worth 1,000 accredited clinical trial sites.
In labour intensive sectors, five diverse schemes aim to modernize clusters and achieve self-reliance in man-made & natural fibres. This budget recognizes MSMEs as the engine of India’s 46.8% export share. To promote high potential companies and establish “Champion MSMEs” that can compete globally, a special Rs 10,000 crore “SME Growth Fund“ would be established. The budget moves from credit based relief to a three broad structural support model.
In Infrastructure & Logistics, capex is pushed to 12.2 lakh crore (4.4% of GDP), the highest in 10 years. Secondly, the introduction of a coastal cargo promotion scheme and the operationalization of the first of the new national waterways in Odisha.
In Service & Social Capital, a strategic ‘Education to Employment and Enterprise’ standing committee to align the services sector with emerging technologies like AI. Setting Up AVGC (Animation, Visual Effects, Gaming, and Comics) Content Creator Labs in 15,000 Schools & 5,000 Colleges. The government also replaces the existing Income Tax Act, 1961, with a new and much more simplified Income Tax Act, 2025, effective from 1st April 2026.
NO CHANGES IN THE TAX SLAB
For the financial year 2026-27, the finance minister didn’t announce any changes in the tax slab. No change in the income tax slab in the Union Budget 2026-27 seems unjust to the ordinary taxpayers, as prices of significant daily necessities such as food, clothes, medical care, etc., are rising every day, but no changes in the tax bracket make it worse, as people are forced to pay high tax rates even though their standard of living is not rising.
| Taxable Income | Tax (%) |
| From 0 to 4,00,000 | Zero |
| From 4,00,001 to 8,00,000 | 5% |
| From 8,00,001 to 12,00,000 | 10% |
| From 12,00,001 to 16,00,000 | 15% |
| From 16,00,001 to 20,00,000 | 20% |
| From 20,00,001 to 24,00,000 | 25% |
| Above 24,00,000 | 30% |
This budget is introduced as a people & youth-centric budget that looks after the underprivileged people, yet no direct relief reached them, In manufacturing sector, introduction of Biopharma Shakti, Indian Semiconductor Mission 2.0, Introduction of Hi- tech tool rooms by central public service enterprises (CPSEs) and increased in the outlay of Electronic Component manufacturing was some major initiatives for large businesses but direct relief to ordinary citizens are still less. Also The new tax structure remains uniform for all age groups which leads to no direct relief for the senior taxpayers of the Country.
CRITICAL ANALYSIS
While the Union Budget guarantees stability & growth in the long run, it fails to address many realistic problems. Currently, during unpredictable global trade and financial flows, investors & lenders have confidence that India will be disciplined by maintaining the fiscal deficit at 4.3% of GDP and avoiding sudden tax shocks. If it’s carried out on time, the huge push on capital spending of ₹12.2 lakh crore for things like freight corridors, rail and port links, and waterways may help for the reduction of transportation costs, increase company efficiency, and slowly create better jobs. Supporting biopharma, textiles, MSMEs, marine and leather exports, as well as schemes for skills, tourism, and the creative economy shows an attempt to build competitive sectors and utilize youth efficiently.
However, this design has real limitations and risks. The government has less ability to step in with extra spending if the economy slows or faces another shock. It keeps the deficit line without introducing major new tax laws. Much of what is promised relies on how well it is delivered in practice. Once large infrastructure projects and complex initiatives begin after the budget speech, they are likely to be delayed or weakened. The entire strategy rests on the hope that public spending will stimulate more investment from businesses. This may not fully occur if companies remain anxious about global demand or domestic consumption.
According to an article of National Herald, Raising the income tax exemption limit to Rs 12.75 lakh benefits only the top 1–2 per cent of the population. The middle class, especially those in the Rs 7 lakh to Rs 12 lakh income bracket, will benefit only marginally. Direct tax collections have declined by about Rs 2 lakh crore, impacting public expenditure on education and health.
CONCLUSION
The Union Budget 2026–27 outlines a growth oriented and future focused vision centred on youth, infrastructure, and strategic sectors, while maintaining fiscal discipline and long-term economic stability. Its emphasis on capital expenditure, MSMEs, and emerging industries reflects an effort to strengthen India’s productive capacity and global competitiveness.
However, the budget falls short in addressing the immediate concerns of ordinary citizens. The absence of income tax relief amid rising living costs and limited direct social support weakens the claim of inclusive growth. Ultimately, the success of this budget will depend on effective implementation and whether its promised growth translates into better jobs, incomes, and living standards for the general public.
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AUTHOR: KARTIKEY SAXENA, 5TH YEAR LAW STUDENT, PRESTIGE INSTITUTE OF MANAGEMENT AND RESEARCH, GWALIOR.
References
- Press Release of Press Investigation Bureau of Government of India (Summary of Union Budget (2026-27)) https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2221458®=3&lang=1