Budget 2026: The Union Budget is more than just a statement of numbers, it is the government’s annual financial statement. It explains how much money the government expects to earn and how it plans to spend it during a financial year, which in India runs from 1 April to 31 March.
Every year, the Union Budget is presented in Parliament on 1 February by Finance Minister of India. For instance, the 2026–27 Budget will be tabled on 1 February 2026, giving the government enough time to implement its plans from the start of the new financial year.
The Budget broadly divided into three parts:
Revenue refers to the money the government earns. It comes mainly from two sources:
Tax Revenue: This is the largest source of income and includes taxes we encounter daily, GST, personal income tax, corporate tax, excise duties, and more.
Non-Tax Revenue: This includes dividends from public sector enterprises, fees, fines, interest receipts, and other charges.
Tax revenue forms the backbone of the Indian government’s finances.
Expenditure shows where the government spends its money. It is broadly divided into two parts:
Revenue Expenditure: Spending on day-to-day needs such as defence, education, healthcare, salaries of government employees, pensions, interest payments, and welfare schemes.
Capital Expenditure: Investment in long-term assets like roads, railways, ports, infrastructure, and public sector projects.
In India, revenue expenditure dominates, accounting for nearly 79% of total spending, while capital expenditure makes up the rest.
The Budget is the government’s main tool for implementing fiscal policy. In simple terms, fiscal policy is how the government uses taxation, public spending, borrowing, and deficit targets to manage the economy and promote growth.
Decisions on tax cuts or hikes, subsidies, welfare allocations, borrowing levels, and fiscal deficit are all part of this process.
It influences prices, taxes, employment, and economic growth
It reflects the government’s economic vision and priorities
It has a direct impact on farmers, the middle class, businesses, and states
It shapes the future of welfare schemes and development projects
The Union Budget draws its authority from Article 112 of the Indian Constitution, which mandates the presentation of the Annual Financial Statement before Parliament.
In essence, the Budget is not just an accounting exercise, it is a powerful document that shapes India’s economic direction and affects the life of every citizen.
