Budget earmarks total expenditure of Rs 53.47 lakh crore for 2026-27: FM Nirmala Sitharaman

On February 11, 2026, Finance Minister Nirmala Sitharaman presented the Union Budget for the upcoming fiscal year 2026-27. The budget earmarks a total expenditure of Rs 53.47 lakh crore, with a record Rs 12.2 lakh crore allocated for capital expenditure. The fiscal deficit is projected to be 4.3% of GDP for FY27, and the states' share is estimated at Rs 25.44 lakh crore.

This budget announcement is highly significant for India's economy and is directly relevant for competitive exams like UPSC, SSC, Banking, and State PSCs. It provides key economic indicators, policy decisions, and resource allocation priorities that are frequently tested in the current affairs sections of these exams. Candidates must thoroughly understand the background, context, stakeholders, and multi-dimensional impacts of this budget to effectively answer questions related to Indian economy and public finance.

The Union Budget is the annual financial statement of the Government of India, presented by the Finance Minister before the Parliament. It outlines the government's revenue and expenditure for the upcoming fiscal year, as well as its plans for taxation, borrowing, and resource allocation.

The budget-making process in India has evolved over the years, with the first Union Budget presented by the British in 1860. After independence, the process has been streamlined and the budget has become a crucial policy instrument for the government to steer the country's economic development.

The legal framework for the Union Budget is provided by Articles 112-117 of the Indian Constitution. Article 112 mandates the presentation of the "Annual Financial Statement" before the Parliament, which is popularly known as the Union Budget. The Finance Minister, as the head of the Ministry of Finance, is responsible for preparing and presenting the budget.

In recent years, the Union Budget has undergone several changes, such as the merger of the Railway Budget with the General Budget in 2017, the advancement of the budget presentation date from the last working day of February to February 1, and the introduction of the Goods and Services Tax (GST) in 2017.

The current budget for 2026-27 is being presented against the backdrop of a global economic slowdown, the lingering effects of the COVID-19 pandemic, and India's efforts to maintain a high growth trajectory. The government's focus is on boosting capital expenditure, supporting the manufacturing sector, and promoting sustainable development.

The key stakeholders involved in the Union Budget 2026-27 are:

Government Bodies/Ministries:

• Ministry of Finance: Responsible for preparing and presenting the budget.
• Ministry of Commerce and Industry: Involved in policies related to trade, investment, and industrial development.
• Ministry of Rural Development: Oversees programs and schemes for rural areas.
• Ministry of Urban Development: Formulates policies for urban infrastructure and housing.
• Ministry of Agriculture and Farmers' Welfare: Focuses on the agricultural sector and the welfare of farmers.

International Players:

• International Monetary Fund (IMF): Provides economic analysis and policy recommendations for India.
• World Bank: Offers development assistance and financing for various projects in India.
• Credit rating agencies (Moody's, S&P, Fitch): Assess India's fiscal health and creditworthiness.

Affected Communities/Sectors:

• Taxpayers (individuals and corporations): Impacted by changes in tax rates and policies.
• Farmers: Affected by allocations for agricultural schemes and rural development.
• Industrialists and businesses: Influenced by policies related to investment, manufacturing, and trade.
• Urban population: Impacted by allocations for urban infrastructure and housing.
• Marginalized communities: Affected by welfare and social security measures.

Expert Opinions:

• Economists and think tanks (NITI Aayog, Centre for Policy Research, etc.): Provide analysis and recommendations on the budget.
• Industry bodies (CII, FICCI, ASSOCHAM): Represent the interests of the private sector.
• Civil society organizations: Advocate for the interests of vulnerable groups and sustainable development.

Political Positions:

• Ruling party (Bharatiya Janata Party): Supports the budget as a reflection of its economic agenda.
• Opposition parties (Indian National Congress, etc.): Critique the budget and offer alternative proposals.

UPSC Relevance:

Prelims:

• The total expenditure of Rs 53.47 lakh crore for 2026-27 and the record capital expenditure of Rs 12.2 lakh crore can be asked as MCQ questions, testing candidates' knowledge of the latest budget figures.
• The fiscal deficit projection of 4.3% of GDP for FY27 and the states' share of Rs 25.44 lakh crore can also be included in the prelims.
• Questions related to the constitutional provisions governing the Union Budget (Articles 112-117) may also be asked.

Mains:

• The Union Budget can be a part of the General Studies Paper III (Economic Development) in the UPSC Mains examination. Candidates may be asked to analyze the budget's impact on the Indian economy, its alignment with the government's policy objectives, and its implications for various sectors.
• The budget can also be relevant for the General Studies Paper II (Governance, Constitution, Polity, Social Justice) in terms of its impact on public finance, federalism, and social welfare.
• The budget can serve as a basis for essay questions on broader themes like the role of the government in economic development, the challenges of fiscal consolidation, or the importance of capital investment for India's growth.

Previous Year Questions:

• The Union Budget has been a recurring theme in the UPSC examinations, with questions asked on various aspects such as fiscal deficit, tax policies, and resource allocation.
• For example, in the 2021 UPSC Mains examination, a question was asked on the impact of the COVID-19 pandemic on the Union Budget and the government's response.

SSC/Banking Relevance:

Current Affairs Importance:

• The Union Budget is a crucial current affairs topic for the SSC and banking exams, as it is frequently covered in the news and discussed in the context of the Indian economy.
• Candidates need to be well-versed in the key budget announcements, their implications, and the government's policy priorities to answer current affairs-based questions effectively.

Economic/Banking Angle:

• The Union Budget has a direct impact on the banking and financial sectors, as it outlines policies related to taxation, interest rates, and credit availability.
• Questions on the budget's impact on the banking industry, monetary policy, and financial markets may be asked in the economic and banking-related sections of these exams.

Static GK Connections:

• The constitutional provisions governing the Union Budget, the budget-making process, and the historical evolution of the budget can be part of the static GK section.
• Candidates should be familiar with the roles of the Finance Ministry, the Parliament, and other government bodies involved in the budget formulation and approval.

Exam Preparation Tips:

• Memorize the key budget figures, such as the total expenditure, capital expenditure, fiscal deficit, and states' share, along with their year-on-year changes.
• Familiarize yourself with the important constitutional articles (112-117) and the legal framework surrounding the Union Budget.
• Understand the budget's alignment with the government's broader economic and policy objectives, such as promoting manufacturing, supporting rural development, and ensuring fiscal sustainability.
• Analyze the budget's impact on different sectors of the economy, including industry, agriculture, and social welfare, to be able to discuss its multi-dimensional effects.
• Stay updated on the latest developments and expert analyses related to the Union Budget, as the exam questions may test your understanding of current events.
• Practice integrating the budget information with your knowledge of other relevant topics, such as monetary policy, fiscal federalism, and sustainable development, to demonstrate your ability to make cross-linkages.

Economic Impact:

GDP/Sector Implications:

• The record capital expenditure of Rs 12.2 lakh crore is expected to boost infrastructure development and have a multiplier effect on the economy, potentially contributing to a higher GDP growth rate.
• Sectors like construction, manufacturing, and transportation are likely to benefit from the increased capital spending, leading to higher output and employment.

Employment Effects:

• The focus on infrastructure development and the manufacturing sector is expected to create new job opportunities, particularly in the blue-collar and skilled labor segments.
• The government's emphasis on rural development and agricultural schemes may also generate employment in the rural areas.

Fiscal Implications:

• The projected fiscal deficit of 4.3% of GDP for FY27 indicates the government's commitment to fiscal consolidation, which is crucial for maintaining macroeconomic stability.
• The states' share of Rs 25.44 lakh crore in the budget reflects the government's efforts to strengthen fiscal federalism and empower the subnational governments.

Industry/Business Effects:

• The budget's policies aimed at promoting the manufacturing sector, such as incentives for new investments and support for small and medium enterprises, are likely to benefit the industrial landscape.
• The continued focus on infrastructure development and the government's push for public-private partnerships may create opportunities for businesses in the construction, engineering, and logistics sectors.

Social Impact:

Communities Affected:

• The allocation of funds for rural development, agriculture, and social welfare schemes is expected to benefit the rural and marginalized communities, including farmers, landless laborers, and the urban poor.
• The budget's provisions for education, healthcare, and skill development may have a positive impact on the overall human development indicators.

Rights/Welfare Implications:

• The budget's emphasis on social security measures, such as enhanced allocations for pension schemes and disability benefits, can contribute to the government's goal of inclusive growth.
• The budget's alignment with the Sustainable Development Goals (SDGs) may have far-reaching implications for the rights and welfare of various communities, particularly in areas like gender equality, clean energy, and climate action.

Political Ramifications:

Governance Implications:

• The budget's focus on improving the efficiency and transparency of public expenditure, through measures like increased use of technology and better monitoring of schemes, can enhance the overall quality of governance.
• The strengthening of fiscal federalism, as evident from the higher states' share in the budget, may lead to improved center-state coordination and better policy implementation.

Policy Direction Changes:

• The budget's policy priorities, such as the emphasis on manufacturing, infrastructure, and sustainable development, may indicate the government's long-term vision and the direction of its economic policymaking.
• The budget's provisions for specific sectors and communities may also reflect the government's political agenda and its efforts to address the concerns of various stakeholders.

International Relations Angle:

• The budget's allocations for defense, diplomacy, and international cooperation may have implications for India's foreign policy and its engagement with the global community.
• The budget's alignment with India's commitments under international agreements, such as the Paris Climate Agreement, may also have diplomatic and geopolitical ramifications.

Environmental Considerations:

Sustainability Aspects:

• The budget's focus on renewable energy, electric mobility, and waste management can contribute to India's efforts to achieve its climate change mitigation and sustainable development goals.
• The increased allocations for green infrastructure, such as urban forests and water conservation, may have positive environmental impacts.

Climate Change Connections:

• The budget's provisions for climate adaptation and disaster resilience, including funding for early warning systems and disaster management capabilities, can help India address the challenges posed by climate change.
• The budget's support for research and development in green technologies may also contribute to India's long-term climate action strategy.

Natural Resource Implications:

• The budget's policies related to the efficient use of natural resources, such as water and minerals, can have implications for their sustainable management and equitable distribution.
• The budget's impact on sectors like agriculture, mining, and forestry may also have indirect effects on the utilization and conservation of natural resources.

In the short term, the implementation and impact of the Union Budget 2026-27 will be closely monitored by various stakeholders, including the government, the opposition, experts, and the general public.

Some key developments to watch out for in the next 3-6 months include:

• The passage of the budget in the Parliament and the reactions from different political parties.
• The rollout of new schemes and programs announced in the budget, and their initial impact on the targeted beneficiaries.
• The government's efforts to achieve the projected fiscal deficit target of 4.3% of GDP for FY27.
• The response of the financial markets and credit rating agencies to the budget's fiscal and economic measures.

In the longer term (1-2 years), the Union Budget 2026-27 will have far-reaching implications for India's economic and social development. Some of the critical areas that will require close monitoring are:

• The extent to which the record capital expenditure leads to tangible improvements in infrastructure, manufacturing, and employment generation.
• The impact of the budget's policies on the agricultural sector, rural development, and the welfare of farmers.
• The government's ability to balance its fiscal consolidation goals with the need for increased social spending and investment in human capital.
• The budget's contribution to India's efforts to achieve its sustainable development and climate change mitigation targets.

Upcoming events and deadlines that may be relevant for the Union Budget 2026-27 include:

• The 2027 G20 Summit, where India will hold the presidency and the budget's alignment with the global development agenda will be scrutinized.
• The 2028 Lok Sabha elections, where the budget's political and economic implications may be a key talking point for the political parties.
• The release of the Economic Survey and the Pre-Budget Economic Analysis in early 2027, which will provide valuable insights into the economic context and the government's policy priorities.

Candidates preparing for competitive exams must closely monitor these developments and updates related to the Union Budget 2026-27, as they are likely to be highly relevant for the current affairs sections of the UPSC, SSC, Banking, and State PSC examinations.