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Union Budget charts a resilient, outward-looking path for Atmanirbhar Bharat: Experts

February 13, 2026 4 min read Economics Polity & Governance GS Paper 2 GS Paper 3
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What Happened

  • Experts have assessed the Union Budget 2026-27 and Economic Survey 2025-26 as charting a resilient, outward-looking development path aligned with the Viksit Bharat 2047 vision
  • Total expenditure estimated at Rs 53.47 lakh crore with a fiscal deficit target of 4.3% of GDP for FY27
  • Capital expenditure (capex) increased to Rs 12.2 lakh crore, a 9% increase over the previous year
  • Key focus areas include sunrise sector manufacturing (semiconductors, biopharma, electronics components, rare earths), infrastructure (seven high-speed rail corridors), and skilling
  • The Economic Survey 2025-26 frames Atmanirbhar Bharat as an outward-oriented competitiveness strategy rather than inward-looking protectionism

Static Topic Bridges

Union Budget — Constitutional and Procedural Framework

The Union Budget is the annual financial statement of the Government of India, presented under Article 112 of the Constitution. It comprises the Revenue Budget and the Capital Budget, and must be passed by Parliament before the government can withdraw money from the Consolidated Fund of India (Article 266). The Budget process involves several stages: presentation, general discussion, scrutiny by Departmentally Related Standing Committees, voting on demands for grants (Article 113), and passing of the Appropriation Bill and Finance Bill.

  • Article 112 mandates the President to cause the Annual Financial Statement to be laid before both Houses of Parliament
  • Article 110 defines a Money Bill; the Rajya Sabha can only recommend amendments to it within 14 days
  • The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 guides fiscal consolidation targets
  • The 2026-27 budget maintains fiscal discipline with a deficit of 4.3% of GDP, down from the revised estimate of 4.4% in FY26

Connection to this news: The Budget 2026-27 represents the government's fiscal roadmap, with the 4.3% deficit target reflecting continued adherence to the FRBM Act's consolidation path while maintaining high capex for growth.

Capital Expenditure (Capex) and its Multiplier Effect

Capital expenditure refers to government spending on asset creation — infrastructure, machinery, and long-term capacity building — as opposed to revenue expenditure on salaries and subsidies. Economic research (including RBI's studies) indicates that the fiscal multiplier for capex in India is approximately 2.5x over three years, meaning every rupee of capex generates Rs 2.5 of GDP. This is significantly higher than the multiplier for revenue expenditure (around 1x), making capex the preferred lever for growth-oriented fiscal policy.

  • Capex in Budget 2026-27: Rs 12.2 lakh crore (up from Rs 11.2 lakh crore in FY26)
  • Capex-to-GDP ratio has been rising steadily from 1.6% in FY20 to approximately 3.4% in FY27
  • Key capex allocations: freight corridors, energy infrastructure, digital infrastructure, seven high-speed rail corridors
  • Effective capex (including grants to states for capital creation) is even higher

Connection to this news: The 9% increase in capex to Rs 12.2 lakh crore signals the government's continued reliance on public investment to crowd in private capital and sustain GDP growth momentum toward the Viksit Bharat 2047 target.

Viksit Bharat 2047 and Atmanirbhar Bharat Strategy

Viksit Bharat 2047 (Developed India by 2047) is the government's long-term vision to transform India into a developed economy by the centenary of independence. The Economic Survey 2025-26 reframes Atmanirbhar Bharat (self-reliant India) not as import substitution but as an outward-oriented strategy focused on building competitive domestic manufacturing, reducing vulnerabilities in critical supply chains, and integrating deeper into global value chains.

  • The three Kartavyas (duties) framework of Budget 2026-27: accelerating economic growth, building human capacity, and ensuring inclusive development
  • Sunrise sector focus: BioPharma Shakti Mission, Semiconductor Mission 2.0, Electronic Component Manufacturing Scheme, Rare Earth Corridor, critical minerals strengthening
  • Seven high-speed rail corridors announced: Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, Varanasi-Siliguri
  • New Income Tax Act, 2025, effective from 1 April 2026, replacing the 1961 Act

Connection to this news: Experts see the Budget as translating the Viksit Bharat 2047 vision into concrete fiscal action, with unprecedented allocations to sunrise sectors and infrastructure designed to make India globally competitive rather than merely self-sufficient.

Fiscal Deficit and FRBM Framework

The fiscal deficit is the difference between total government expenditure and total revenue (excluding borrowings). India's Fiscal Responsibility and Budget Management (FRBM) Act, 2003 originally set a target of 3% of GDP for the Centre's fiscal deficit. The N.K. Singh Committee (2017) recommended a revised glide path, suggesting 2.5% of GDP by FY23, which was disrupted by the pandemic. The government has since charted a new consolidation path.

  • FRBM Act, 2003 (amended 2018): mandates fiscal transparency and deficit reduction
  • N.K. Singh Committee (2017) recommended: 3% by FY20, 2.5% by FY23 (disrupted by COVID)
  • Fiscal deficit trajectory: 6.4% (FY22) to 5.6% (FY24) to 4.8% (FY25 RE) to 4.4% (FY26 RE) to 4.3% (FY27 BE)
  • Debt-to-GDP ratio is a key medium-term anchor alongside the deficit target

Connection to this news: The Budget's 4.3% fiscal deficit target demonstrates the government's attempt to balance growth-oriented spending (high capex) with fiscal prudence, continuing the post-pandemic consolidation trajectory.

Key Facts & Data

  • Total expenditure in Budget 2026-27: Rs 53.47 lakh crore
  • Capital expenditure: Rs 12.2 lakh crore (9% increase over FY26)
  • Fiscal deficit target FY27: 4.3% of GDP (down from 4.4% revised estimate for FY26)
  • New Income Tax Act, 2025 effective from 1 April 2026
  • Minimum Alternate Tax reduced to 14% (effective April 2026)
  • Seven high-speed rail corridors announced
  • Key sunrise sector schemes: Semiconductor Mission 2.0, BioPharma Shakti Mission, Electronic Component Manufacturing Scheme