Union Budget 2026 – Perplexity Reigns As Financial Trajectory Lacks Momentum.

New Delhi; February 2026: Immediately after presenting the Fiscal Budget FY:2026-2027, the honourable finance Minister Nirmala Sitharaman adopted a new approach, of interacting with 30 university students – those who have attended the Budget Session Live, rather than formalising press interview. She has hailed her approach as a departure from the usual practice of giving interviews to newspapers and television studios after the Budget presentation.

Speaking at the Youth Dialogue on Budget 2026, Sitharaman said the idea came from her team, who suggested taking a different approach this time. “This time my team thought of doing something out of the ordinary, saying, ‘You go after presenting the budget to each one of the studios or each one of the newspapers and give them inter'”, she said. 

As usual in a typo, she has blamed the previous government while asserting, “I’m not saying everything which happened in the past is bad, but because of the way in which economies grew after coming out of imperialism, our pace of growth, our type of growth, and our type of governance made it delayed. Everything was delayed”.

Former Finance minister P. Chidambaram while reacting to the budget has said, “this is a budget void of an economic strategy, without economic statesmanship”. The Congress leader said the Union Budget presented by Finance Minister Nirmala Sitharaman in Parliament “failed the test of economic strategy and economic statesmanship”. Chidambaram said he is not sure if the Finance Minister and the central government read the Economic Survey 2025-26 and even if they have, they have decided to discard the challenged and fall back on “their favourite pastime of throwing words at the people. Every pre-budget commentator and writer, and every student of economics, must be astonished by what he or she heard in the Finance Minister’s speech to Parliament today”.

“I accept that a Budget is more than a statement of annual revenues and expenditure. In current circumstances, the Budget speech must lay out a narrative that addresses the major challenges outlined in the Economic Survey released a few days ago. I am not sure if the government and the

Finance Minister had read the Economic Survey 2025-26. If they had, it appears they have decided to discard it completely, and fall back on their favourite pastime of throwing words–usually acronyms–at the people”.

Chidambaram said he can count at least 10 challenges identified by the Economic Survey and many knowledgeable experts.

“The penal tariffs imposed by the United States have created stress for manufacturers, especially exporters; protracted trade conflicts that will weigh on investment; the growing trade deficit, especially with China; the low Gross Fixed Capital Formation (around 30%) and the reluctance of the private sector to invest; the uncertain outlook for the flow of FDI (foreign direct investment) into India and the persistent outflow of FPI for the last several months. The agonisingly slow pace of fiscal consolidation and the continued high fiscal deficit and revenue deficit, contrary to the FRBM. The persistent gap between officially announced inflation numbers and the ground realities in terms of bills for household expenditure, education, healthcare and transport; the closure of lakhs of MSMEs and the struggle for survival of the remaining MSMEs; the precarious employment situation, especially unemployment and growing urbanisation and the deteriorating infrastructure in urban areas (municipalities and corporations”. Chidambaram said none of this was addressed by the Finance Minister in her speech.

The Chief Minister of Himachal Pradesh, Sukhvinder Singh Sukhu, yesterday have termed the tapering and effective ending of the Revenue Deficit Grant (RDG) as a “black day for Himachal Pradesh”, alleging that it amounts to a violation of the constitutional rights of states under India’s federal structure. Sukhu said Himachal Pradesh has been receiving the Revenue Deficit Grant under Article 275(1) since 1952 and that discontinuing it ignores the structural realities of hill states.

“The cut and ending of the Revenue Deficit Grant are a direct violation of the constitutional rights of states in a federal structure. Small and mountainous states like Himachal Pradesh can never become revenue-surplus states. This is a globally accepted convention for mountain regions”, Sukhu said.

The Chief Minister said the 16th Finance Commission report, tabled along with the Union Budget, has dealt a severe blow to the state’s finances. He said Himachal was expecting nearly Rs 50,000 crore as RDG for the 2026-31 period, but the recommendations have gone against the interests of the state.

“During the first year, around Rs 11,431 crore was provided as interim RDG. We had clearly demanded that there should be no tapering and that the grant should continue in equal proportion, as was sought during the 15th Finance Commission as well”, he said. Sukhu said the state’s borrowing capacity has also been constrained, as loan limits are decided on the basis of GSDP, while Himachal’s taxation powers were severely impacted after the end of GST compensation.

Highlighting agrarian distress, the Chief Minister said free trade agreements with New Zealand and the European Union have badly affected apple growers and farmers in the state. “Our apple and other farmers have suffered badly due to FTA’s. At the same time, MGNREGA’s demand-driven employment guarantee has weakened after changes like the G-RAM-G mechanism”, he said.

Sukhu said Himachal Pradesh is already under financial stress, worsened by successive natural disasters. “In 2023-24, we faced massive natural disasters. A central team assessed losses of around Rs 9,300 crore, but funds were released after nearly two years. In 2025, the Samej area of Shimla district was hit again. A central team visited, but no relief has been released so far. We are fighting legally for our rights”, he said.

Emphasising Himachal’s ecological contribution, Sukhu said the state provides environmental services worth ₹90,000 crore to the country. “We are the lungs of North India. Five rivers originate from Himachal Pradesh. We protect forests, glaciers and rivers and help neighbouring states. We are the water bowl of northern India, yet we receive almost nothing in return–only 12% royalty from private

hydropower players”, he said.

The Chief Minister said if RDG is ended, states like Himachal should be given greater rights over their natural resources and taxation powers. “If Revenue Deficit Grant is stopped, then we must be given the right to impose taxes on our resources. This is the right of our farmers, orchardists and people. We have contributed our natural wealth to the nation and deserve justice”, he said. Sukhu have also raised the issue of pending grants like BBMB and Shanan hydel project compensation, alleging that despite

“The interests of Himachal Pradesh are paramount. I appeal to the BJP state leadership and all MPs to rise above party lines and take up the state’s case with the Union government”, Sukhu said. He also said he was ready to be part of a joint delegation, even if it is led by former Chief Minister and Leader of Opposition Jai Ram Thakur, to seek justice for Himachal Pradesh. “I am ready to go with a BJP-led delegation to the Centre to protect the rights of Himachal Pradesh. This is not about politics; this is about the state’s future,” Sukhu added.

Team Maverick.