Union Budget Highlights
Nominal GDP Growth Projection for 2025-26 is 10.1%, seen as reasonable and acceptable.
Real GDP growth in 2025-26 is projected between 6.3%-6.8%, with a buffer if growth picks up.
The capital expenditure for 2025-26 is ₹11.2 lakh crore, which is nearly the same as the 2024-25 estimate (₹11.1 lakh crore).
The primary goal of the Budget is to accelerate growth and push India towards developed country status.
The necessary growth rate to achieve this is estimated at 8% in the Economic Survey.
Tax Revenue and Government Expenditure
Growth in gross tax revenues (GTR) has been decreasing over recent years: from 13.5% in 2023-24 to 10.8% in 2025-26.
The growth rate of Goods and Services Tax (GST) has also fallen from 12.7% in 2023-24 to 10.9% in 2025-26.
The share of direct taxes in GTR has increased from 52% in 2021-22 to 59% in 2025-26, a positive development.
Personal income-tax growth has slowed from 25.4% in 2023-24 to 14.4% in 2025-26, partly due to tax concessions.
The corporate income-tax growth is expected to rise from 7.6% in 2024-25 to 10.4% in 2025-26.
Government expenditure growth is 7.6% in 2025-26, slower than the projected nominal GDP growth of 10.1%.
The share of capital expenditure in total expenditure has improved significantly by 10 percentage points from 2020-21 to 2025-26, reflecting a shift towards productive investments.
Non-Tax Revenues
Non-tax revenues in 2025-26 are primarily boosted by dividends from the Reserve Bank of India and public sector companies, contributing about ₹3.25 lakh crore.
Non-tax revenues overall have risen from ₹5.3 lakh crore (RE) in 2024-25 to ₹5.8 lakh crore (BE) in 2025-26, signaling a slight improvement in revenue sources beyond taxes.
Fiscal Deficit and Transparency Concerns
The Budget has moved away from focusing on the fiscal deficit as a key indicator of fiscal health.
Instead, it shifts focus to debt-GDP ratio, which is seen as a less transparent and more vague measure.
The lack of a clear fiscal deficit target may affect fiscal discipline and private investment.
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