Finance Minister Nirmala Sitharaman will present her ninth consecutive Union Budget today, marking another key moment in India’s economic policy calendar. The Budget is expected to lay out measures aimed at sustaining growth in what remains the world’s fastest-growing major economy.
For fiscal 2027, policy priorities are likely to include defence, infrastructure, capital expenditure, power and faster growth in affordable housing, according to expectations ahead of the presentation.
Shift in Budget speech structure
This year’s Union Budget is expected to break with a long-standing tradition in the structure of the finance minister’s speech. Until now, most major policy announcements were typically made in Part A, while Part B focused on taxation. This time, Part B is expected to be used to present a broader vision for India’s economic future.
The finance minister is also expected to outline short-term priorities as well as longer-term goals, positioning India’s economic strategy as the country moves deeper into the 21st century, with emphasis on domestic strengths and global ambitions.
Market backdrop ahead of Budget
Ahead of the Budget presentation, equity markets opened lower. Gold and silver futures also declined sharply on the Multi Commodity Exchange, extending the impact of a severe two-day global sell-off.
India’s economy has so far remained resilient despite punitive tariffs imposed by the United States under President Donald Trump. Growth is forecast at 7.4 per cent for the year ending March 31, supported by government spending on infrastructure and tax measures that boosted consumption.
Focus on rural development and jobs
Rural development and agriculture are expected to be among the top priorities in Union Budget 2026. The finance minister may announce higher allocations for programmes aimed at expanding employment opportunities in rural areas.
The Rural Development Ministry has sought a sharp increase in funding for the new employment guarantee scheme, ‘Viksit Bharat – G Ram G’ or VB-G Ram G, proposing a budget of Rs 1.51 lakh crore, a 72 per cent rise. In comparison, the Mahatma Gandhi National Rural Employment Guarantee Scheme received Rs 86,000 crore in the previous Budget.
Fiscal deficit and capital expenditure
The budgeted fiscal deficit for fiscal 2026 is estimated at 4.4 per cent of gross domestic product. With the government having achieved a consolidation path that brought the deficit below 4.5 per cent, markets will closely watch signals on further debt-to-GDP reduction.
Capital expenditure for the current fiscal year has been budgeted at Rs 11.2 lakh crore. The government is expected to continue prioritising capex, with a possible increase of 10 to 15 per cent, as private sector investment remains cautious.
Investment reforms and global challenges
Further policy changes aimed at attracting domestic and foreign investment are also expected. These may include steps to make it easier for foreign companies to invest in defence firms that already hold licences.
The Union Budget 2026 comes at a time of mixed signals globally. While domestic demand remains steady and inflation has eased from recent highs, uncertainties linked to geopolitics, commodity price volatility and uneven monetary policy easing by major central banks continue to pose challenges.