One of my distinct childhood memories is of an uncle who used to travel abroad for work almost every year. After every foreign trip, he would invariably host a family dinner. At these gatherings, he would passionately explain the difference between heaven (Europe and the USA) and hell (India). He would make every adult regret being born in India and inspire every child to dream of settling abroad.
My brother and I were least interested in what the uncle had to say. Our attention was firmly fixed on the final act—the opening of the goodies bag after dinner. He would generously distribute “gifts” brought from “foreign.” These invariably included bathroom slippers, shaving and dental kits, cosmetics, and writing instruments picked up from hotel rooms and flights; bottles of perfume; some clothes; small toys; and souvenirs—mostly bought from dollar stores (a fact I discovered only in hindsight after travelling myself).
Three essential items were bottles of liquor from the duty-free shop, a wristwatch, and some electronic gadget (a camera, oven, juicer, or VCR). These, however, were offered for sale. In hindsight, I realize that he probably recovered the cost of his entire trip by selling these items.
The Union Budget feels uncomfortably similar.
Each year brings an elaborate build-up, breathless commentary, and a speech promising balance, growth, and inclusion. By evening, optimism peaks. By the next morning, reality intrudes—through fine print, revised calculations, and newly discovered burdens. The middle class feels poorer, markets recalibrate, and expectations quietly reset.
For nearly 30 years, this cycle has remained remarkably consistent. Budgets do not fail because governments lack intent; they fail because they are asked to be miracles. Growth engine, redistribution tool, political manifesto, and fiscal discipline document—all rolled into one.
The Union Budget 2026 arrives with an especially inconvenient truth: the government has more commitments than cash. Capital expenditure must rise, social obligations cannot shrink, and global conditions are unforgiving. Additional resources must be raised—and no amount of pre-budget consultation can change that arithmetic.
For those expecting the finance minister to pull a bazooka out of her tablet, I have said this before and reiterate it here: the Union Budget in India broadly serves five objectives…
The Union Budget in India usually has five objectives:
(i) Presenting the annual accounts of the previous year's Union Government for consideration and approval of the Parliament.
(ii) Presenting the policy roadmap for the future. This usually is a political statement.
(iii) Presenting the budget of the Union government for the following year. This includes the budget for various revenue and capital expenditure of the union government, allocation of resources to states and union territories, and sources of revenue to meet the budgeted expenditure and allocations.
The key monitorable in this exercise usually is the difference between the revenue and expenditure. The excess of budgeted expenditure over budgeted revenue is termed as fiscal deficit.
This deficit is met by the union government through borrowings from various sources. Changes in provisions of various tax laws are also monitored closely as it impacts the tax liability and compliance requirement for the taxpayers.
(iv) Presenting an action taken report for the previous budget proposals.
(v) Presenting a medium-term fiscal road map in terms of the Fiscal Responsibility and Budget Management Act 2003 (FRBM Act).
The interest of most capital market participants is usually limited to the third objective listed above. The rich eagerly wait for the budget to get fiscal incentives to make investments and find loopholes for evading taxes. The middle classes wait for some tax concessions. The poor anticipate more subsidies and welfare schemes.
This year, in particular, the budget anticipations are mostly focused on the following two points:
1) How the finance minister will manage resources to meet the requirements for higher capital expenditure to stimulate the investment demand and pay commission payout. Raising tax rates or imposing additional levies may not be preferred options. Therefore, abandoning fiscal consolidation by retaining current fiscal deficit (4.4% of GDP) target; raising non tax revenue (aggressive disinvestment); higher tax revenue through stricter compliance; and additional duties on precious metals may be some of the preferred sources of additional revenue.
However, market conditions and higher yields could make disinvestment and aggressive borrowing challenging.
2) Does the finance minister announce any measures to support the capital markets, especially to stem the incessant outflows of capital that is adversely affecting the INR, Bonds, and the sentiments of domestic investors.
As far as I am concerned, I will listen to the finance minister mainly for objectives (ii) and (iv). More importantly, I would like reassurance that the government is fully conscious of global challenges, has a credible strategy to deal with them, and is firmly in control of the balance of payments situation.
I carry no expectations of tax concessions. I am convinced that my effective tax rate has already bottomed out. Any concession—if granted—would likely be ad hoc and possibly misleading, much like the shiny gifts at my uncle’s dinner: attractive at first glance, but rarely of lasting value.
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