Budget 2026: A Glimpse into India’s Finances

As India prepares for the Union Budget 2026, the economic landscape of the world’s fifth-largest economy is expected to undergo transformative changes. The Union Budget, traditionally delivered by the Finance Minister, plays a pivotal role in shaping the nation’s economic policies. From deciding capital expenditure to setting fiscal deficit targets, the Budget lays the groundwork for India’s growth story.

Historical Overview of India’s Union Budgets

India’s Union Budget has seen significant changes over the years. From Jawaharlal Nehru’s post-independence budgets to Nirmala Sitharaman’s digital-first approach, the Indian economy has evolved.

Early Years (1947-1970s): In the early years, the union budgets were focused on laying the foundation for economic development, with heavy investments in public sector enterprises and industrialisation.

In a circular, the exchanges confirmed a live trading session on February 1.

The budget is expected to set the economic direction for the next three to four years and will likely influence the Indian economy in the first half of 2025.

This budget gains added importance following a slowdown in India’s economic growth.

GDP growth fell to 5.4% in the July-September quarter of 2024, marking a seven-quarter low and prompting calls for decisive fiscal measures.

Key expectations

Taxpayers are hoping for revisions in income tax slabs, especially under the new tax regime. Businesses are expecting incentives to boost investment and job creation.

Analysts predict the government may introduce measures to stimulate rural development, healthcare, and infrastructure while maintaining fiscal discipline.

Interim vs annual budgets

An annual budget details the government’s financial roadmap for a full financial year, including allocations and revenue projections. It focuses on comprehensive policy directions and sectoral priorities.

In contrast, an interim budget is presented during election years or transitional periods. It allows for essential government expenditures while avoiding major announcements or policy changes.