The Union Budget for FY 2026–27 was presented as a reaffirmation of India’s macroeconomic confidence, with the finance minister foregrounding stability, fiscal discipline and moderate inflation.

Structured around a “three-Kartavya” framework, the budget emphasised growth, resilience and expanded access, projecting infrastructure, manufacturing, services, digital expansion and tourism as the main pillars of future economic momentum.

However, beyond the headline narrative of growth and reform, the budget has triggered sharp scrutiny for its limited attention to inclusion and redistribution.

Critics argue that while the intent to accelerate economic expansion is clear, the mechanisms to ensure that growth translates into broad-based welfare are weak. In an economy marked by widening inequality, persistent informalisation of labour and entrenched caste and gender hierarchies, the budget is seen as falling short of addressing structural vulnerabilities.

The projected GDP growth of around 7% has been showcased as evidence of economic strength. Yet this expansion has not translated into equitable outcomes. With wealth inequality remaining among the highest globally, the continued emphasis on capital expenditure—particularly large-scale infrastructure—has raised concerns that benefits will accrue mainly to established capital owners, with limited spillovers for low-income households. The budget’s growth-led fiscal approach, critics note, proceeds without a corresponding commitment to progressive redistribution.

The absence of substantive ground-level interventions is especially visible in the lack of expanded income support, strengthened social safety nets or universal public services. Instead, capital-intensive growth has been prioritised over labour-intensive welfare, reinforcing fears that existing inequalities may deepen rather than narrow.

On gender, official optimism about rising female labour force participation has been questioned. Analysts point out that headline participation rates conceal the nature of women’s work, which remains overwhelmingly informal, underpaid and insecure. Much of the recent increase appears driven by economic distress rather than genuine empowerment, as households respond to rising costs and unstable incomes. The budget does little to acknowledge or address these realities.

Announcements such as district-level girls’ hostels and credit-linked initiatives for women entrepreneurs have been welcomed in principle. Yet the lack of clarity on funding, scale and institutional design raises doubts about their transformative potential. Critics argue that credit-led strategies, without addressing deeper constraints such as asset ownership, care responsibilities and market access, risk increasing financial precarity rather than enabling empowerment.

Concerns are even sharper regarding the poor and marginalised. The fiscal framework continues to favour capital-heavy investments—such as high-speed rail, industrial corridors and resource extraction—while offering limited immediate relief to households facing stagnant wages and rising living costs. At the same time, the scaling back of subsidies and pandemic-era support measures has occurred despite persistent food inflation and weak income growth among the poor.

Tax reliefs and production incentives announced in the budget are also seen as skewed towards middle- and high-income groups and capital-intensive sectors. In the absence of stronger social protection or direct transfers, these measures risk reinforcing inequality rather than mitigating it.

From a development economics perspective, the budget highlights a familiar trade-off between growth and distribution. While infrastructure-driven expansion can raise national output, it does little to alter income distribution without complementary redistributive policies. India’s tax structure, which relies heavily on indirect taxation, further limits the scope for equity, while the lack of progressive tax reform constrains fiscal space for social investment.

Sectoral allocations reinforce these concerns. Agriculture spending has effectively stagnated in real terms, with core farmer-support schemes seeing cuts or flat allocations. Given that agriculture supports nearly half the workforce while contributing a much smaller share of GDP, this raises questions about income stability and rural livelihoods. Research and development in agriculture has also seen only marginal increases, suggesting reallocation rather than expansion.

Health spending shows nominal growth, including increases for flagship schemes and infrastructure. Yet allocations for family welfare and preventive care remain subdued, and overall public health expenditure continues to lag behind the scale of India’s needs. Health research funding, while rising, remains modest relative to the country’s disease burden.

The textiles sector, despite its potential as a mass employment generator, has not received consistent fiscal backing. Allocations fluctuate, and key incentive schemes remain well below earlier projections, limiting the sector’s capacity to absorb labour transitioning out of agriculture.

Education spending follows a similar pattern of cuts followed by partial restoration. School education schemes return to earlier levels without major expansion, while higher education funding rises modestly, largely benefiting central institutions. Research spending remains marginal, raising concerns about long-term productivity and skill development.

Overall, the FY 2026–27 budget presents a vision of growth and stability but leaves critical questions unanswered on equity and inclusion. Analysts argue that without stronger redistribution, expanded social protection and targeted support for vulnerable groups, high growth alone will not translate into meaningful improvements in living conditions. India’s development trajectory, they contend, will ultimately be judged not by GDP figures but by outcomes for those at the margins of the economy.