The Union Budget 2026–27 presented by Smt. Nirmala Sitharaman appears inconsequential and directionless, even as the Economic Survey 2025–26 itself acknowledges that the Indian economy has reached a critical juncture, with the global environment undergoing geopolitical realignments that will influence investment flows, supply chains, and growth prospects for years to come. The Budget neither addresses these core challenges nor offers any meaningful policy shift to prepare India for the turbulent global situation.
As consistently warned by CITU and other Central Trade Unions, both the Economic Survey and the Budget seek to manage the crisis of the global capitalist order by shifting its burden onto the working class and the common people. The so-called reform agenda continues to centre on the notification of anti-worker Labour Codes and the dilution of quality control norms, undermining labour rights and domestic industry. The Budget speech began with rhetoric on “Yuva Shakti” but ended with a proposal for a high-powered “Education to Employment and Enterprise” Standing Committee with targets extending up to 2047. The youth of India need decent and secure employment now, not distant promises.
The Finance Minister’s record ninth consecutive Budget serves as a numerical façade concealing an economy in deep distress. In its pursuit of a 4.3 per cent fiscal deficit target and a reduction of the debt-to-GDP ratio to 55.6 per cent, the government has placed macro-fiscal optics above the pressing realities of hunger and unemployment. This is a squeeze Budget that withdraws liquidity from the hands of the poor; despite a total expenditure of ₹53.5 lakh crore, the real picture reveals a systematic erosion of social support.
There is no serious attempt to raise revenue by taxing highly profitable corporates. Instead, a 12.49 per cent rise in non-tax revenue in 2026–27 is driven mainly by a projected 16.9 per cent increase in dividends from PSUs, effectively squeezing them and pushing them into competition with private players rather than strengthening public assets. Increasing dependence on non-tax revenue will be finally instrumental for increasing burden and squeeze on people. The 49.5 per cent jump in external grants between BE 2025–26 and BE 2026–27 raises concerns over policy autonomy, fiscal sustainability, and exposure to external pressures. Increasing burden of debt servicing and interest liabilities has been forcing atrocious cut in development and welfare related budget allocations as visible in this budget also.
The Budget is a blatant gift to the billionaire class. The Minimum Alternate Tax (MAT) has been reduced from 15 per cent to 14 per cent, corporate safe-harbour provisions have been expanded, and the timeline for Advanced Pricing Agreements (APAs) has been shortened to two years, easing scrutiny of multinational corporations. Meanwhile, the common people face a ₹28.7 lakh crore net tax burden driven by regressive GST and personal income tax. For the first time, personal income tax collections (₹14.66 lakh crore) exceed corporate tax collections (₹12.31 lakh crore).
Further concessions include a five-year tax holiday for non-residents supplying capital goods to toll manufacturers in bonded zones and customs duty waivers on raw materials for aircraft parts and critical medical components for private manufacturers—socialising risks while privatising profits. The budget has furthered its decriminalization process for the tax evaders and corporates in the guise of ease of business.
The target of ₹80,000 crore worth of disinvestment and the deceptive claim of ease of living through the reduction of import duty from 20 per cent to 10 per cent on goods for personal use have been announced, while the flagship programme, PM Vishwakarma Yojana, has witnessed a reduced allocation—from ₹3,993 crore in the 2024–25 actuals to ₹3,891 crore.
The Budget serves the corporate classes by further expanding and increasing allocations for incentives. The Electronics Components Manufacturing Subsidy 2.0, with an outlay of ₹40,000 crore, the customs duty exemption on imports for nuclear power projects until 2035, and the tax holiday for foreign companies investing in data centres until 2047 clearly demonstrate the pro-corporate priorities of the government.
The allocation in Railway promotes elitification, pouring resources into seven high-speed rail corridors such as Mumbai–Pune and Hyderabad–Chennai, while ordinary passengers endure overcrowded coaches and senior citizen concessions remain unrestored. Telecom infrastructure allocations for private service providers have surged from ₹9,650 crore to ₹24,000 crore, directly subsidising private players. Despite tall claims on AI and innovation, allocations for India’s AI Mission have been slashed from ₹2,000 crore to ₹1,000 crore.
Increased capital expenditure is being financed through aggressive asset monetisation and privatisation via InvITs, REITs, NIIF, NaBFID, and proposed public-asset-specific REITs. This reflects a two-pronged strategy: extracting higher dividends from PSUs to plug fiscal gaps and handing over public assets to private corporates for profit.
While infrastructure spending has risen in defence, metro, maritime sectors, and railways, increased leasing of railway assets signals further monetisation. The proposed Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu under a ₹7,280 crore magnet scheme threaten the displacement of tribal communities and environmental destruction. The ₹10 lakh crore asset-recycling roadmap over five years amounts to a fire sale of CPSE land and infrastructure. Health allocation stands at a meagre ₹1.01 lakh crore, only 1.96 per cent of total expenditure, while “Biopharma Shakti” of ₹10,000 crore has been created as a grant to big pharma.
Although the budget is presented as a landmark initiative for supporting MSMEs, in reality, the actual increase in budgetary allocations for MSMEs appears to be narrowly oriented towards activities which are largely situated at the lower end of production hierarchies. On the other hand, the government has allowed SEZ units to sell in the Domestic Tariff Area at concessional duties, undermining domestic firms. This reveals a consistent policy of shielding capital from risk while leaving labour unprotected.
Agriculture-related schemes such as PMKSY, RKVY, PM-Kisan, and crop insurance show no real increase after adjusting for inflation, despite the deepening agrarian crisis. Fertiliser allocations have been cut by 8.4 per cent, while food subsidy allocations remain stagnant. Claims of boosting agricultural productivity are therefore misleading. There is no increase in allocation for the basic services schemes, resulting in no scope of improvement either in the services or the wages and conditions of the scheme workers.
Welfare allocations for Scheduled Castes, Scheduled Tribes, North-Eastern regions, agriculture, rural development, education, health, and social welfare have been cut. The Gender Budget has been reduced by ₹51,144 crore. Urban development allocations have fallen by 13.16 per cent despite claims of promoting city economic regions.
Though allocations for energy and nuclear research have increased, these are clearly aimed at facilitating private entry rather than strengthening public research, with private sector entry into nuclear power at the core of this policy. Despite higher R&D spending under RDI and BIO-RIDE, allocations for public sector manufacturing, solar power, and PSU investment have declined or stagnated, even as schemes such as KUSUM and PM Surya Ghar Muft Bijli Yojana have seen manifold increases, indicating indirect subsidisation of private capital.
The stagnation of employment in the formal sectors has pushed millions into insecure gig work. Despite repeated references in the Economic Survey, the Budget provides no allocation for gig workers’ welfare and fails to honour even existing commitments, let alone provide legal recognition. Similarly, no budgetary allocation has been made for the other sections of the unorganized workers.
This is a completely anti-people and anti-working-class Budget at a time when Indian workers are struggling to survive amid economic turmoil. The Budget provides grants to private corporates while betraying the interests of the people. It is promoting de-growth in real terms and further worsen distributive equity in the already prevailing obscene inequality scenario.
CITU unequivocally rejects this anti-worker, pro-corporate Budget and calls upon the working people of India to intensify united resistance against these policies, to come onto the streets, and to march towards the 12 February General Strike.
Issued by
Elamaram Kareem
General Secretary
