The Union Budget is no longer a neutral fiscal statement confined to revenue and expenditure. It has become a central instrument through which governance priorities are asserted, social choices are structured, and constitutional values are indirectly shaped. Union Budget 2026-27 must therefore be read not merely as an economic exercise, but as a document of constitutional consequence....
The Union Budget is no longer a neutral fiscal statement confined to revenue and expenditure. It has become a central instrument through which governance priorities are asserted, social choices are structured, and constitutional values are indirectly shaped. Union Budget 2026-27 must therefore be read not merely as an economic exercise, but as a document of constitutional consequence. Its language, silences and emphases reveal how fiscal authority is exercised, how accountability is framed and how democratic scrutiny is managed. Against this backdrop, the Budget warrants examination not for what it promises, but for how power is organised, justified and insulated through fiscal design.
Kartavya as Rhetoric, Not Responsibility
Union Budget 2026-27 is delivered in the idiom of kartavya—duty to growth, duty to aspiration, duty to inclusion. The choice of language is neither accidental nor neutral. It appeals to discipline, patience and collective endurance. What it carefully avoids is responsibility that can be measured, enforced or questioned. Budgets are not moral manifestos. They are exercises of State power. In constitutional terms, their legitimacy is tested not by narrative coherence but by adherence to principles of fiscal accountability, democratic oversight and distributive justice. When the language of duty is deployed without corresponding enforceable obligation, it operates not as governance, but as cover. Over the last several years, the Union Budget has steadily drifted from being a forum of parliamentary contestation into an exercise in presentation. Union Budget 2026 continues this trajectory—treating economic policy as inevitability rather than choice and fiscal outcomes as technical necessity rather than political decision.
The Economic Survey: Growth Without Social Accounting
The Economic Survey preceding the Budget projects confidence—7.4 per cent GDP growth, moderated inflation, improved tax buoyancy and banking sector resilience. On paper, the macroeconomic story appears stable. What remains conspicuously under-analysed is distribution. Employment quality, wage stagnation, informal sector vulnerability and household indebtedness receive limited attention. Participation rates are highlighted, but job security is ignored. Consumption recovery is inferred, even as real purchasing power continues to erode. Fiscal consolidation is celebrated, while its social consequences are left unexplored. The Survey functions less as a diagnostic tool and more as a pre-emptive justification, framing fiscal choices as unavoidable outcomes of economic logic rather than political priorities open to challenge.
Fiscal Federalism and the Recalibration of Financial Power
India's constitutional architecture never envisioned fiscal symmetry between the Union and the states. The Centre was granted superior taxing authority, while the states were entrusted with substantial expenditure responsibilities, an imbalance intended to be moderated through institutional correctives such as the Finance Commission and by a political commitment to cooperative federalism. Fiscal capacity, after all, is the lifeblood of autonomy. Without meaningful control over resources, federalism risks becoming administrative rather than constitutional. Union Budget 2026 does not openly announce a restructuring of this balance. Yet a quieter recalibration appears to be underway. The growing reliance on cesses and surcharges — revenues that fall outside the divisible pool — narrows the share automatically transferred to states through formula-based mechanisms. Conditional transfers and centrally sponsored schemes increasingly tie financial flows to Union-designed policy frameworks, blurring the line between coordination and direction. Control over financial flows is ultimately control over policy priorities. This evolution does not necessarily amount to constitutional impropriety; federations often centralise in response to economic complexity. But when revenue authority accumulates upward even as expenditure responsibilities remain widely dispersed, fiscal choice begins to contract. Federalism does not disappear — it is subtly reconfigured.
GST and the Question of Tax Sovereignty
The Goods and Services Tax marked one of the most consequential fiscal reorganisations since Independence. By subsuming a wide range of indirect taxes, GST significantly altered the revenue autonomy of states. Recent proposals in the Finance Bill 2026 — including adjustments to intermediary service rules and broader indirect-tax rationalisation — further illustrate the Union's continuing role in standardising the national tax regime. The GST Council was envisioned as a forum of cooperative decision-making — a collaborative structure the Supreme Court acknowledged in Union of India v. Mohit Minerals. Yet the experience of compensation negotiations and revenue uncertainty has revealed the vulnerability that accompanies pooled sovereignty. When taxation authority is shared but fiscal dependence persists, the balance of bargaining power inevitably shifts. Centralisation rarely declares itself dramatically; it advances through institutional design. The deeper constitutional concern is therefore not coordination itself, but the gradual erosion of fiscal discretion.
Capital Expenditure and the Architecture of Uneven Growth
Public capital expenditure remains the Budget's centrepiece, rising to ₹12.2 lakh crore. Infrastructure corridors, logistics networks, railways, ports and industrial clusters dominate the fiscal imagination. The constitutional concern, however, is not whether infrastructure supports growth but whether growth has become overly dependent on executive-led expenditure with minimal legislative scrutiny. Infrastructure-led development frequently displaces costs through land acquisition conflicts, environmental degradation, labour precarity and social disruption, while concentrating gains. Employment creation remains indirect and uncertain. Wages, labour protection and workplace security do not feature as fiscal priorities. Growth is pursued aggressively. Distribution is treated as incidental.
Manufacturing, PLI Schemes and the Concentration Question
Manufacturing revival is once again foregrounded through expanded Production-Linked Incentive schemes, semiconductor missions and strategic sector investments. These announcements echo similar claims made repeatedly since 2014. Industrial policy, in itself, is not constitutionally suspect. What raises concern is the structure of incentive allocation. PLI regimes disproportionately favour capital-intensive entities with scale, compliance capacity and institutional proximity. Small enterprises are acknowledged rhetorically but remain peripheral. Labour protections do not receive parallel reinforcement. Article 14 jurisprudence demands that State action avoid arbitrariness. Preferential incentives governed by opaque criteria and selective access risk entrenching economic concentration while being presented as industrial reform.
Fiscal Discipline, Deferred Costs and Inter-Generational Burden
The Budget projects a fiscal deficit of 4.3 per cent of GDP and a declining debt-to-GDP ratio, presenting consolidation as prudence. Yet consolidation is never neutral. Revenue mobilisation increasingly relies on indirect taxation and compliance expansion, shifting the burden towards consumption and labour rather than capital. Social sector expenditure is restrained in the name of efficiency. Universal entitlements retreat; conditional schemes proliferate. Borrowing is postponed, restructured and moved across balance sheets. Fiscal optics improve, but underlying vulnerabilities are deferred rather than resolved, passing costs forward rather than confronting them.
Human Capital Without Labour Security
Education, skilling, allied health expansion and employment-linked programmes occupy prominent space in the Budget. Yet these commitments remain policy-driven rather than legally anchored. India's education–employment mismatch persists. Skills are produced without corresponding labour protections. Aspirations are encouraged; security is absent. Welfare is fragmented into schemes administered through executive discretion rather than enforceable entitlement. When social protection is removed from legal anchoring, constitutional guarantees are reduced to symbolic aspiration rather than operative obligation.
Inclusion as Enumeration, Not Empowerment
Farmers, women, Divyangjan, regions and marginal communities appear extensively across budgetary tables. Enumeration substitutes empowerment. Schemes multiply, but scale remains constrained. Transfers are targeted, conditional and administratively mediated. Fragmentation replaces universality. Inclusion is promised, but structurally limited by design.
The Budget's Legal Silence
Perhaps the most telling feature of Union Budget 2026 is its constitutional quietness. There is little engagement with parliamentary oversight of fiscal discretion, transparency in public–private fiscal arrangements, constitutional limits on executive spending or judicial scrutiny of economic policymaking. Fiscal authority is framed as technical necessity, insulated from legal debate. This depoliticization of budgetary power is itself a political act—narrowing democratic space while expanding executive latitude.
Doctrine Ignored: Fiscal Power and the Supreme Court
This silence stands in contrast to settled constitutional doctrine. In R.C. Cooper v. Union of India, the Supreme Court rejected the claim that economic policy is immune from constitutional scrutiny. In Vivek Narayan Sharma v. Union of India (Demonetisation), dissenting opinions cautioned that fiscal decisions with sweeping consequences must satisfy proportionality and procedural accountability. In Manohar Lal Sharma v. Union of India (Electoral Bonds), the Court reaffirmed that fiscal instruments shaping democratic processes must meet standards of transparency. The doctrine is clear: fiscal power is constrained. Budgetary practice increasingly proceeds as if those constraints are inconvenient rather than binding.
Nirmala Sitharaman and the Normalisation of Narrative Budgets
Union Budget 2026 is also best read as part of a longer pattern under Finance Minister Nirmala Sitharaman. Across successive budgets, economic governance has increasingly relied on narrative discipline—emphasising resilience, patience and long-term vision—while postponing accountability for outcomes. Structural unemployment, wage stagnation, declining household savings, and uneven recovery have been consistently reframed as transitional phenomena. Redistribution has been replaced by targeting; rights by schemes; debate by presentation. Budget 2026 does not depart from this approach—it consolidates it.
Beyond Kartavya, Towards Accountability
Union Budget 2026 does not announce economic collapse. Nor does it mark transformative reform. It reflects continuity of narrative governance, executive-centric fiscal authority and limited institutional scrutiny. Growth is invoked but its beneficiaries remain unevenly mapped. Fiscal discipline is emphasised but its social consequences remain under-examined. Duties are articulated; rights recede. The deeper constitutional concern is not deficit arithmetic but democratic contraction. When budgets cease to be sites of contestation and become performances of inevitability, fiscal power drifts beyond the reach of law. The unresolved question is not whether India can grow but who decides the terms of that growth, within a constitutional order committed equally to democracy, accountability and federal equilibrium. The future of India's fiscal constitution may well be decided not through amendment, but through accumulation. Quietly. Gradually. Structurally.
The author is an Advocate Practising at High Court of J&K and Ladakh. Views are personal.