Ground reality on Budget

Finance Minister Nirmala Sitharaman’s ninth consecutive Union Budget presented to parliament on February 1, marks a historic milestone, cementing her position as India’s longest-serving Finance Minister. Her tenure has spanned crises ranging from COVID 19 to global geopolitical shocks, and the 2026–27 budget reflects her continued emphasis on structural reforms and infrastructure-led growth. Yet, beneath the headline achievements lies a debate about inclusivity, equity, and the lived realities of ordinary citizens. The government’s strategy remains anchored in high capital expenditure, with `12.2 lakh crore allocated to railways, roads, defense and other infrastructure. Proponents argue this is the most sustainable path to job creation, productivity gains, and the long-term goal of a $5 trillion economy by 2030 and “Viksit Bharat” (“Developed India),” by 2047. Infrastructure, they contend, is the backbone of modernisation, enabling private investment and global competitiveness. Fiscal discipline has also been maintained, with the deficit targeted at 4.3% of GDP for FY27, signaling prudence alongside ambition. However, critics highlight the uneven distribution of benefits. Persistent food inflation and muted rural consumption remain pressing concerns. While corporate India may benefit from large-scale infrastructure contracts, micro, small and medium enterprises (MSMEs) and lower-income households struggle with rising costs and stagnant demand. The absence of significant relief in tax slabs under the new Income Tax Act 2025 has disappointed the middle class, already burdened by inflation and high living expenses. Simplification of the tax code-from 819 sections to 536-may improve compliance, but does little to address immediate financial stress. Equally troubling is the stagnation or reduction in allocations for social schemes such as MGNREGA, crop insurance, and rural housing. These programs have historically provided safety nets for vulnerable populations, especially in agrarian regions. By prioritizing capital-intensive projects, the budget risks sidelining the urgent needs of rural communities, where demand remains sluggish and livelihoods precarious. Analysts caution that infrastructure spending, while transformative, does not absorb labour at the scale required to address India’s youth unemployment challenge. The question, therefore, is whether the government’s vision tilts too heavily toward a “capitalist” model of development. Infrastructure-led growth is undeniably vital, but it cannot substitute for direct interventions in food security, rural welfare, and employment generation. The agrarian sector, which sustains nearly half of India’s population, requires more than symbolic support; it demands robust investment in irrigation, crop diversification, and farmer incomes. Without this, the promise of inclusive growth risks becoming rhetoric. At the same time, the budget does reflect continuity and stability. By resisting populist giveaways and focusing on long-term capital formation, Sitharaman signals confidence in India’s economic trajectory. The challenge lies in balancing this vision with the realities of inequality. A resilient economy must be both globally competitive and socially inclusive. Infrastructure may build the highways of tomorrow, but social schemes sustain the households of today. Ultimately, the Union Budget 2026–27 embodies both promise and peril. It reinforces India’s march toward structural transformation, yet leaves unresolved questions about equity and immediate welfare. As the nation aspires to “Viksit Bharat,” policymakers must ensure that progress is not measured solely in kilometers of highways or billions in capital expenditure, but in the dignity, security, and opportunity afforded to every citizen.