The Three Foundational Pillars: At the heart of this Budget lies three well-articulated kartavyas: accelerating sustainable economic growth to remain integrated with the global economy; fulfilling people’s aspirations while achieving ‘Atmanirbharta’ and ensuring equitable access to resources across all families, communities, and regions.
Fiscal Prudence Meets Growth: FM Nirmala Sitharaman has demonstrated fiscal discipline by containing the deficit at 4.3 per cent for FY27e. While net borrowing remains aligned with expectations, slightly higher gross borrowing may create bond market nervousness. The capital expenditure outlay has been raised to ₹12.2 trillion from ₹11.21 trillion essential given an uneven private capex recovery. The allocation spans high-speed rail corridors, semiconductor mission support, chemical parks, and critical mineral supply chains. Power sector incentives recognise surging demand from data centres and technology industries a forward-looking move for India’s digital economy.
Drive Employment Generation: The rejuvenation of 200 legacy industrial clusters and establishment of mega textile parks represents a thoughtful approach to enhancing competitiveness. This gains particular significance with the India-EU free trade agreement, promising substantial market access for exporters. More importantly, these labour-intensive initiatives address India’s employment challenge.
Intelligent Self-Reliance: As protectionism rises globally, India’s Budget champions intelligent import substitution over blanket protection. The strategic push encompasses semiconductors, rare earths, biosimilars, and clean technology. The emphasis on building domestic capital-goods capabilities and independent supply chains for defence and aerospace signals India’s intent to become indispensable in critical supply chains.
Institutional Reforms: Two proposals deserve special mention. The high-level committee on banking for Viksit Bharat could fundamentally examine whether India’s PSB-dominated banking architecture is fit for the next growth phase. If pursued seriously, this could catalyse meaningful reform in governance, capital structures, and long-term credit flows. The education-to-employment committee focused on services recognises that India’s growth engine must evolve to provide pathways for our youths’ aspirations. Bridging the education-employability gap remains one of India’s most pressing challenges.
The Unfinished Agenda: Disinvestment continues as the Achilles’ heel of fiscal planning, with targets consistently missed. This must be pursued in mission mode. While the Centre has shown fiscal prudence, states must mirror this approach by optimising their spending patterns. The unchanged income tax slabs offer stability but no relief to taxpayers grappling with inflation is an area deserving future attention.
Navigating the Global Paradox: We face a peculiar moment: despite India’s strongest macroeconomic performance, the global system no longer automatically rewards sound economics with currency stability and capital inflows. The old playbook has been disrupted by geopolitics and protectionism. However, optimism is warranted. FTAs, structural reforms, and a potential US trade deal could reverse adverse trends by FY2027. India’s demographics, improving business environment, and global value chain integration position us favourably.
Budget 2026 plays the long game by investing in infrastructure yielding returns over decades, building manufacturing capabilities that take years to mature, and establishing institutions shaping India’s trajectory for generations. In choosing prudence over populism and strategic self-reliance over protectionism, the FM has presented a Budget worthy of India’s aspirations. The true test lies not in the speech, but in execution. The destination remains clear; the path, while challenging, has been thoughtfully charted.
The writer is Chairman, Hinduja Group of Companies (India)
 "Budget 2026")