FOR ONE NATION, ONE BUDGET DAY

THE best indicator of the importance of announcements made by the Finance Minister Nirmala Sitharaman in her budget speech for 2026-27 is in page 24 of a document titled ‘Implementation of budget announcements of 2025-26.

- PRAVEEN CHAKRAVARTY

In her last year’s budget speech, the FM had made a grandiose announcement with loud thumping of desks, of a scheme to ‘make India a global hub for toys manufacturing’. Page 24 tells us that mere ‘inter-ministerial consultations have been completed’ in a full year since that announcement.

So, the FM’s announcements of new schemes for manufacturing everything from seaplanes and sports goods to shipping containers and biopharma products in this year’s budget can be dismissed easily as hollow rhetoric. Recall that the Prime Minister had announced ‘Make in India’ to double our manufacturing base with much hoopla in 2014, when manufacturing was 17 percent of the gross value added. Forget doubling, manufacturing has fallen to 13 percent of GVA now.

The lesson is clear—to boost manufacturing, the government has to get out of the way, not get in the way with schemes and announcements. The annual budget exercise must be a dreary display of government finances, how and how much it plans to raise money from and spend on. Every budget faces demands to lower taxes, spend more on welfare and keep debt/deficit low, which is always an impossible trinity.

GST is the largest source of tax revenues for the Union. But the Union budget has no role in it. The GST rates that determine the amount of revenues are set by the GST Council outside of the annual budget show. Recall that the GST rates were cut and rationalised in September 2025, leaving a %1.3-lakh-crore hole in the Union government’s finances.