Dhurjati Mukherjee
The annual Union Budget has failed to generate excitement among ordinary citizens; their main concern is a potential increase in prices. In contrast, those in the higher social strata pay close attention to what advantages they might gain for their businesses in the coming financial year.
Note some basic facts: the top 10% owning 65% of India’s wealth and the top 1% about 40% while the bottom half owning just 6.4%. “Four out of five Indians subsist on less than Rs 200 per day but one subsists on less than Rs 100 a day. Net household financial savings are at a five-decade low of 5.2% while household debt is sharply up to 41% from 35% in 2019,” as per opposition Congress recent report on the economy.
During her budget presentation, Finance Minister Nirmala Sitharaman identified three primary kartavyas (duties) for the government: accelerating and sustaining economic growth, addressing aspirations of people, and building capacities by ensuring equitable access to resources for all families, communities, sectors, and regions. While these objectives were articulated in broad terms, a closer look at the budget offered few targeted measures for the common citizen, small-scale farmers, or traders, with a clear emphasis placed on bolstering manufacturing and industrial sectors.
Stakeholders anticipated more definitive announcements on key issues such as comprehensive electrification and affordable housing initiatives. The impact on employment generation remains to be seen as the year progresses. Nonetheless, commendable steps have been taken to promote skill development, support the electronics and IT textiles industries, and enhance value addition in agriculture.
The government has allocated Rs 10,000 crore each for an SME growth fund and container manufacturing over five years. Other initiatives include textile expansion, upgradation, and programmes for weavers and artisans, along with mega textile parks to boost value addition. These efforts aim to create jobs for engineers and skilled technicians, though their impact will only be clear in the next fiscal year.
There has, however, been an emphasis on infrastructure development which includes establishing seven high-speed rail corridors with an allocation of Rs 5000 crore over five years – benefitting mainly the southern states and Maharashtra — and a freight corridor from Dankuni to Surat as well as developing industrial corridors in some cities in Odisha. But the question is why are there just industrial corridors in one state?
In a move at attracting private investment, the capital expenditure outlay has been pegged at Rs 12.2 lakh crore in FY27 against Rs 11.2 lakh crore in the current fiscal with heightened focus on Tier-II and Tier-III cities and temple towns with an outlay which is welcome. But as per reports of 15th Finance Commission, which will end in March, Rs 8000 crore allotted for a performance-based challenge fund to develop eight new cities has remained unutilized in the last five years. Will the government fulfil the promised allocation and ensure states utilize the funds judiciously?
Technology is being prioritised, with AI and robotics highlighted. The second phase of semiconductor manufacturing will receive Rs 10,000 crore, while electronics manufacturing under PLI gets Rs 40,000 crore and new high-tech tool rooms aim to boost capital goods. Mobile phone production increased 146%. Proposed rare earth corridors in southern India and Odisha target import substitution and may generate jobs for engineers and computer scientists.
A five-year Rs 10,000 crore programme has been allocated to the biopharma sector under Biopharma SHAKTI to develop India into a global manufacturing hub. Additionally, a NIMHANS-II in Ranchi focused on mental health and trauma care is proposed, though more centers could be considered. The government’s emphasis remains on Ayurveda, with three national institutes and upgraded pharmacies proposed, alongside plans to export Ayurveda products.
In the health sector, while reducing the prices of 17 cancer drugs and easing import restrictions for rare disease treatments, alongside promoting medical tourism, provide some benefits, these measures do not sufficiently address the needs of lower-income segments, who lack access to an adequate healthcare system and must often travel significant distances for specialised care. In a densely populated country such as India, rural and underdeveloped districts require targeted attention, and question remains whether 50-100 specialty hospitals would be established within the next three to five years. Furthermore, the Health Mission’s allocation of Rs 39,390 crore towards strengthening primary healthcare, maternal and child health services, and disease control programmes remains significantly below actual requirements.
Although the budget allocation of Rs 1.06 lakh crore represents a 10% increase over the revised estimates for the current financial year, it may appear optimistic. However, it raises questions about whether this amount is truly sufficient to meet the needs of disadvantaged and marginalised groups who lack access to affordable healthcare. As anticipated, the PM Ayushman Bharat Health Infrastructure Mission was allotted over Rs 64,000 crore.
In the education sector, the plan to establish five university townships in industrial hubs, each with universities, colleges, and skill centres, is notable. While a girls’ hostel is proposed in every district, including a college alongside it would have been beneficial. The initiatives for data centre hubs and vocational training are positive steps. Since education is on the concurrent list, the Centre is responsible for providing quality educational facilities in select districts to support disadvantaged students. However, there has been no announcement of increased research grants for universities, and an 8% rise in funding to Rs 1.39 lakh crore for 2025-26 appears insufficient considering market inflation.
Regarding agriculture, the finance minister announced measures aimed at increasing farmers’ income, including targeted support for high-value crops in coastal regions and the North-East, with a particular focus on coconuts, sandalwood, cashew, and cocoa. An allocation of Rs 350 crore has been made for this initiative. The importance of fisheries and animal husbandry was also highlighted, given their contribution of 38% to agriculture’s gross value added; these sectors are expected to be further developed, although the impact may not extend to small fishery owners.
The new technologies would primarily benefit large-scale farmers, without providing further details. Notably, there was an unexpected reduction in fertiliser subsidies. Meanwhile, the Krishonnati Yojana under Agriculture Ministry received an allocation of Rs 11,200 crore, representing a 40% increase from Rs 8,000 crore in 2025-26, despite the overall ministry budget remaining largely unchanged.
It should be noted that certain regions and states require increased productivity, and while many expected the government to address this issue, no statements were made on the topic. In addition, water shortages are worsening, making it important for the government to propose strategies for encouraging dryland farming in affected areas, but these measures were not outlined. There is also mention of a new initiative called SHE Mart (Self-Help Entrepreneur Mart), intended to help boost farmers’ incomes, yet details about this program were lacking.
The budget could be seen as pro-elite, with measures like cheaper foreign education, reduced duties on imported household goods, and risk funds favouring lenders. Incentives mainly benefit businesses, while the middle class faces higher iron and steel prices and a lack of affordable housing initiatives. Although touted as “youth-driven,” the budget lacks clear plans for job creation to support the younger generation. More needs to be spelt out. —INFA
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