Best of BS Opinion: What FM Sitharaman's much awaited Budget 2026 revealed

Here are the best of Business Standard's opinion pieces for today

The Union Budget 2026–27 arrives at a moment of unsettled global conditions and hence, has chosen caution over spectacle. The government has placed its weight behind public and state-led capital expenditure, expanding infrastructure projects and offering larger interest-free loans to states to keep growth steady, highlights our editorial. Private manufacturing investment has stayed hesitant, pushing policymakers to lean more openly towards services such as IT, tourism, health care and the creative industries. Fiscal policy reflects the same restraint, with consolidation slowed and attention shifting to debt-to-GDP management. Households are promised simpler regulations and easier access to public services, yet the plan ultimately depends on state capex and a services-first strategy to create jobs in a technology-driven economy. 

A K Bhattacharya notes that the fiscal deficit target for 2025-26 was met mainly through expenditure compression and a surge in non-tax revenues from the RBI and public-sector banks. He argues that this success hides serious underspending in health, housing, rural infrastructure and new-economy programmes, exposing weaknesses in implementation. Large unutilised funds with states and reliance on a narrow set of receipts raise doubts about durability. For 2026-27, revenue estimates appear deliberately cautious, with GST and customs collections soft and disinvestment goals dependent on political resolve. Consolidation is effectively postponed, and the Budget, while avoiding populism, signals only gradual reform. 

Meanwhile, Mukesh Butani, Nikky Jhamtani and Spandana Koona write that tax policy is being recast around trust and lower litigation. In the 2026 budget, penalties are rationalised, prosecution for minor defaults is eased, and updated returns are encouraged to make dispute resolution predictable. Corporate tax changes aim to hasten the shift to the concessional regime and convert minimum alternate tax into a final lower levy from April 2026. They argue that unified safe-harbour rules, faster pricing agreements and incentives for data centres and GIFT City strengthen investor confidence, though silence on the global minimum tax still leaves a gap. 

On the impact of the Budget on the markets, Akash Prakash observes that markets view the Budget as largely unchanged from the past, disappointed by the absence of capital-gains relief and higher transaction taxes on derivatives. Fiscal arithmetic remains credible, with spending tilted to defence, roads and railways and subsidies trimmed. Yet heavy dependence on divestment and bank dividends looks risky, he says, and the plan offers few ideas to revive private investment. Though the Budget maintains discipline and avoids shocks, it does little to shift investor sentiment or open a new phase of growth. 

In her column, Kavita Rao focuses on the changes in the income tax regime and the fiscal balance. She notes that not enough seems to have been done to accelerate movement from the old tax regime to the new one. To achieve this, the Budget has proposed changes in the Minimum Alternative Tax (MAT) as a nudge. Tax holidays and safe harbour commitments are aimed at inviting global capital, especially in the IT and ITeS sector.  However, periodic review of these will be necessary, she cautions. On the fiscal side, the targeted debt-to-GDP ratio - the new metric instead of the fiscal deficit - at 4.3 per cent provides some fiscal space. However, Rao worries that revenue forecasts do not match up to the GDP forecasts, with CGST reporting lower numbers. 

Ajay Shah writes that the Budget exercise should be seen through a lens of scepticism, given it is exclusively in the nature of industrial policy. The government, he writes, seems to be prodding the economy in multiple sectors to see how it works out. The scepticism arises from three pain-points: a socialist calculation perspective, wherein the government doesn't really what companies should do; state capability, in which India has a poor track record; and political economy, wherein companies, once they realise the government is doing the heavy lifting, switch from boosting productivity to lobbying for favourable policies, often in the wrong direction. Meanwhile, there is a long list of genuine policy problems that have not been touched upon. 

VS Krishnan argues that the Union Budget lacks an overarching strategy on how to boost jobs or enact factor-market reforms. While it has announced a number of changes in both Customs duties and clearances to improve ports efficiency, it has failed to lay down a broad road map for Customs rationalisation covering both tariffs and process reforms. Though it has undertaken a number of steps required to stimulate the sunrise industries of the future, what it lacks is to define the government’s broad strategy in critical areas such as employment generation, skilling, raising agricultural productivity, and improving human capabilities.  Shekhar Gupta writes that the Union Budget 2026 is one designed for geopolitically fraught times. At the same time, it is also one that exudes political confidence at home, with no freebies, tax cuts, or favours done to friendly states or even states headed for elections later this year. And where hopes were for lower capital gains tax to assuage foreign investors, the government has hiked the Securities Transaction Tax three-fold in a bid to curb speculation - and losses - by domestic retail investors. The silver lining, though, is the 10 basis point increase in defence spending; even better, the full utilisation by the defence forces of their capital budgets shows that for the first time in a decade, they have thrown off their spending shackles.  Stay tuned!