Economy and Union Budget - Revision Sheet
3-5 questions: latest Budget numbers, constitutional articles on public finance, and landmark economic reforms. Budget figures below are from the Union Budget 2026-27 presented on 1 February 2026.
1. Union Budget 2026-27 - headline numbers (BE)
| Item | 2026-27 BE | Comparison |
|---|---|---|
| Fiscal deficit | 4.3% of GDP (about Rs 16.9 lakh crore) | 4.4% in 2025-26 RE |
| Primary deficit | About 0.7% of GDP | - |
| Total expenditure | About Rs 53.5 lakh crore | Rs 49.6 lakh crore in 2025-26 RE |
| Capital expenditure | About Rs 12.2 lakh crore | About Rs 11 lakh crore in 2025-26 RE |
| Effective capital expenditure | About Rs 17.15 lakh crore (about 4.4% of GDP) | - |
| Non-debt receipts | About Rs 36.5 lakh crore | Rs 34 lakh crore in 2025-26 RE |
| Net tax receipts of the Centre | About Rs 28.7 lakh crore | Rs 26.7 lakh crore in 2025-26 RE |
| Gross market borrowing | About Rs 17.2 lakh crore | Net from dated securities about Rs 11.7 lakh crore |
| Central government debt | 55.6% of GDP | 56.1% in 2025-26 RE; target 50 plus/minus 1% by 2030-31 |
| Nominal GDP growth assumed | About 10% | - |
2. Budget 2026-27 - key announcements
- Framed around three Kartavyas: accelerate and sustain growth; build people's capacity; ensure resources and opportunities for every family, region and sector.
- Ninth consecutive Budget of Finance Minister Nirmala Sitharaman; no change in income tax slabs.
- Income-tax Act, 2025 comes into force on 1 April 2026, replacing the 1961 Act.
- High Level Committee on Banking for Viksit Bharat to review the banking sector; restructuring of PFC and REC.
- Biopharma SHAKTI: Rs 10,000 crore over 5 years; 3 new NIPERs, 7 upgraded, 1,000+ clinical trial sites.
- India Semiconductor Mission 2.0; Electronics Components Manufacturing Scheme raised to Rs 40,000 crore.
- Seven high-speed rail corridors (e.g. Mumbai-Pune, Delhi-Varanasi, Varanasi-Siliguri); Dankuni-Surat dedicated freight corridor; 20 new National Waterways in 5 years.
- Rs 10,000 crore SME Growth Fund; rare earth corridors; three chemical parks.
- TCS on LRS for education/medical and on overseas tour packages cut to 2%; STT on futures raised to 0.05%.
- Tax holiday till 2047 for foreign firms providing cloud services through Indian data centres.
3. Finance Commission
| Commission | Chair | States' share |
|---|---|---|
| 1st (1951) | K.C. Neogy | - |
| 14th | Y.V. Reddy | 42% |
| 15th | N.K. Singh | 41% |
| 16th (2026-31) | Arvind Panagariya | 41% retained |
4. Constitutional provisions on public finance
| Article | Subject |
|---|---|
| 110 | Definition of Money Bill |
| 112 | Annual Financial Statement (Budget) |
| 113 / 114 | Demands for grants / Appropriation Bill |
| 246A / 279A | GST law-making power / GST Council |
| 266 | Consolidated Fund and Public Account of India |
| 267 | Contingency Fund (at the disposal of the President) |
| 270 | Taxes levied and distributed between Union and States |
| 280 | Finance Commission |
| 360 | Financial emergency |
5. Budget history
- First budget of British India: James Wilson, 1860 (he also introduced income tax - 24 July is Income Tax Day).
- First budget of independent India: R.K. Shanmukham Chetty, 26 November 1947.
- Most budgets presented: Morarji Desai (10).
- Railway Budget separated in 1924 (Acworth Committee) and merged with the Union Budget in 2017; Budget date advanced to 1 February from 2017.
- FRBM Act: 2003; N.K. Singh review committee (2017) recommended debt as the anchor.
6. Reforms and institutions
| Reform | Key facts |
|---|---|
| GST | 1 July 2017; 101st Amendment Act, 2016; Council chaired by Union FM |
| GST 2.0 | 22 September 2025; main slabs 5% and 18%; special 40% for sin/luxury goods (56th Council meeting) |
| NITI Aayog | 1 January 2015, replaced the Planning Commission (1950); chaired by PM |
| Labour Codes | Four codes in force from 21 November 2025, replacing 29 laws |
| 8th Pay Commission | Chair Justice Ranjana Prakash Desai; constituted November 2025 |
7. Data and growth
- Economic Survey 2025-26 (29 January 2026): growth of 6.8%-7.2% projected for 2026-27; potential growth about 7%. Prepared by the Economic Division, DEA, under CEA V. Anantha Nageswaran.
- New GDP series: base year 2022-23, released 27 February 2026 (old base 2011-12).
- New CPI series: base year 2024 (basket of 358 items). IIP is also moving to base 2022-23.
- CPI is compiled by NSO (MoSPI); WPI by the Office of the Economic Adviser, DPIIT.
- RBI's October 2026 projections for 2026-27: real GDP growth 7.1%, CPI inflation 5.2%.
Difference to remember: capital expenditure (Rs 12.2 lakh crore) vs effective capital expenditure (Rs 17.15 lakh crore, which adds grants to states for creating capital assets).