The Union Budget 2026 presented by Finance Minister Nirmala Sitharaman today strikes a perfect balance between high capital expenditure (capex) and high growth, Prime Minister Narendra Modi said today.
The Union Budget - Sitharaman's ninth straight Budget - also reinforces India's strong position in the world, PM Modi said.
PM Modi said this Budget embodies a vision of trust-based governance and human-centric economic framework. India is not content with being the fastest-growing economy; it wants to be the third-largest economy, he said.
The prime minister also pointed out that the Budget promotes tourism in the northeastern region. On the whole, this year's Budget will give India's 'reform express' new energy and momentum, PM Modi said.The finance minister has retained the share of states in the common pool of taxes at 41 per cent. "As recommended by the commission, I have provided Rs 1.4 lakh crore to the states for the year 2026-27 as Finance Commission grants," Sitharaman said in her Budget speech.
The commission headed by Arvind Panagariya had submitted its report to the President in November 2025 after consultations with all states and Union Territories, many of which sought a higher share.
Sitharaman pegged the fiscal deficit at 4.3 per cent of GDP for the next fiscal as against 4.4 per cent for the financial year ending March 2026.
In line with this, she said the debt-to-GDP ratio is estimated to be 55.6 per cent of GDP in Budget Estimate (BE) 2026-27, compared to 56.1 per cent of GDP in Revised Estimate (RE) 2025-26.
A declining debt-to-GDP ratio will gradually free up resources for priority sector expenditure by reducing the outgo on interest payments, she said.