Budget 2026-27

BLOG 10/2026 DATED 3RD FEBRUARY 2026

India tabled the budget for 2026-27 in the Parliament on 1^st Feb 2026. This was 89^th budget presented in the Independent India. As a normal the opposition parties found flaws in the budget speech and dumped it as waste while the government described the same as pathbreaking. The truth lies in between. Let us see what need to be appreciated and what is not so good.

Strengths:

• 225% Capex increase in Drinking Water and sanitation i.e from Rs 23916 crore to Rs 47275 crore, a step in the right direction.
• 97% Capex increase in Telecom sector i.e from Rs 23916 crore to Rs 47275 crore, need of the hour.
• Integrated program for Textile’s sector. This will help generate employment as well as exports. Textiles is one of the most labour-intensive industries and a push to this sector may generate employment opportunities.
• Push to infrastructure investments such as Railways and waterways.
• 18% increase in defense allocation is also a welcome step considering the present international relations. Rs. 5000 crore deep tech fund for private sector defense R&D displayed that India prefers indigenous technology in defense.
• Providing tax holiday till 2047 for foreign cloud and data centre service providers using Indian facilities enhances India’s capability as Data centre hub.
• Emphasis on manufacturing industries like Semi-Conductor, Rare earth metals and Bio Pharma.
• Increased STT on Derivative transactions. This is taken as negative by market but as per market reports most retail investors lose in the derivative market (over 90%) and hence this may act as a deterrent as well as source of income for the Government.

Weakness:

• No specific announcement or target addressing the unemployment problem. Though certain decisions viz Textile sector and manufacturing push may bring down unemployment.
• 24% of the Budget is met through borrowing. India has a huge Debt to GDP ratio of 80% while Central Govt shares it to the extent of 56%. FM proposed to bring it down to 55% which is too slow and sluggish. This is against the target of 40% by FRMB (Fiscal Responsibility and Budget Management).
• Fiscal deficit is proposed to be brought down from 4.4% to 4.3% against the target of 3% by FRBM. Revenue deficit remain stagnant at 1.5%. This shows low commitment to fiscal prudence. For understanding the budget deficit terms, refer sillypoint blog on budget deficits https://atsillypoint.com/budget-deficits/
• Agriculture still forms a big chunk of economy; there is hardly any push on modernising agriculture and increasing yield.
• Allocation for Central Pollution Controlled Board Rs. 123 crore (In previous budget it was Rs. 126 crore which was later cut down to 116 crore). No planning to control pollution, probably one of the biggest metro cities problems. No mention of Air pollution while FM is standing in Delhi, the pollution king of the world.

Budget in numbers:

Presenting budget for a population of 140+ crore is walking on an extremely tight rope and as far as this year budget is concerned it is difficult to conclude as to which side it goes. There are many sector specific announcement that are welcome however the budget presentation need to be in line with the FRBM and also the Economic Survey. Considering both positives and negatives, sillypoint concludes this budget as….

6/10