The Union Budget is India’s most important financial statement, outlining government priorities, spending plans, taxation policy, and structural reforms. The Budget 2026–27, presented and passed in Parliament on 1 February 2026, builds on the framework of Union Budget 2025–26 and sets new targets for growth, fiscal discipline, and sectoral development. In this article, we compare the Union Budget 2026 vs Budget 2025 highlights how India’s fiscal strategy is evolving from broad-based support to targeted, technology-driven growth.
1. Fiscal Targets & Expenditure
- Fiscal Deficit: The difference between the government’s total expenditure and revenue (excluding borrowings). It indicates how much the government needs to borrow to meet its expenses.
- Capital Expenditure (Capex): Money spent on long-term assets like infrastructure, buildings, and equipment. It is essential for sustainable growth.
Budget 2025–26
- Total expenditure was ₹50.65 lakh crore. This included both revenue and capital spending.
- The fiscal deficit was 4.4% of GDP, reflecting the gap between revenue and total expenditure.
- Capital expenditure was ₹11.21 lakh crore, focused mainly on infrastructure and transport projects.
Budget 2026–27
- Total expenditure increased to ₹53.5 lakh crore, showing a year-on-year increase of ₹2.85 lakh crore.
- Fiscal deficit target was set at 4.3% of GDP, showing slight reduction and fiscal discipline.
- Capital expenditure rose to ₹12.2 lakh crore, the highest ever allocation, supporting roads, railways, and technology infrastructure.
Interpretation:
The government is increasing spending to boost economic growth while maintaining fiscal responsibility. This balance is essential for long-term stability.
2. Taxation & Compliance
- Income Tax: Tax on earnings of individuals and companies.
- TCS (Tax Collected at Source): Tax collected by sellers on certain payments, reducing compliance burdens.
- STT (Securities Transaction Tax): Tax levied on the trading of securities, ensuring regulated investment flows.
Budget 2025 Highlights
- Provided a full rebate for individuals earning up to ₹12 lakh.
- Aimed to benefit middle-income taxpayers.
- Reduced compliance pressure through simplified tax filing measures.
Budget 2026 Changes
- Extended deadline for revised income tax returns to 31 March, giving taxpayers more time to correct errors.
- TCS on overseas education, tourism, and medical remittances was standardized at 2%, simplifying taxation.
- STT on futures increased from 0.02% to 0.05%, and on options premiums from 0.10% to 0.15%, affecting traders.
Impact:
- Individuals have more time and clarity in filing taxes.
- Tax compliance is simpler and less burdensome.
- Financial markets have better transparency with revised STT rates.
3. Infrastructure & Transport
- Infrastructure: Basic facilities like roads, bridges, water supply, and electricity, which support economic activity.
- National Waterways: Routes for inland water transport that reduce logistics costs and improve trade efficiency.
Budget 2025
- Capital expenditure of ₹11.21 lakh crore was allocated to infrastructure.
- Focus was on roads, railways, ports, and logistics hubs.
- Investment aimed to boost economic growth and create jobs.
Budget 2026
- Capex increased to ₹12.2 lakh crore, about 9% higher than the previous year.
- Transport allocation alone reached ₹5.98 lakh crore, supporting major projects.
- New 7 high-speed rail corridors and 20 National Waterways were approved.
Effect:
- Improved connectivity across cities and states.
- Enhanced trade efficiency and reduced transportation costs.
- Created long-term employment opportunities in construction and operations.
4. Defence & Security
- Defence Capital Outlay: Spending on equipment, aircraft, ships, and technology.
- Revenue Defence Spending: Operational costs including salaries, training, and maintenance.
Budget 2025
- Defence allocation: ₹4.91 lakh crore.
- Focused on modernisation, R&D, and indigenisation.
- Supported domestic manufacturing and self-reliance.
Budget 2026
- Defence allocation: ₹5.94–7.84 lakh crore, a 22% increase in capital outlay.
- Funds allocated for aircraft, naval fleet, and advanced technologies.
- Emphasis on Make in India initiatives for defence equipment.
Significance:
- Strengthens national security.
- Promotes domestic defence manufacturing.
- Enhances long-term technological capabilities.
5. Agriculture & Rural Development
- Agriculture: Activities including crop cultivation, livestock, and fisheries.
- Rural Development: Programs improving infrastructure, income, and living standards in villages.
Budget 2025
- Allocation: ₹1.71 lakh crore for agriculture and allied sectors.
- Focused on irrigation, Kisan Credit Cards, and crop support.
- Aimed at increasing farmer incomes and productivity.
Budget 2026
- Allocation: ₹1.62 lakh crore plus ₹95,692 crore for VB‑GRAM livelihood mission.
- Introduced AI-based advisory platforms for better crop planning.
- Enhanced support for fisheries, water conservation, and rural employment.
Effect:
- Improves agricultural productivity and income stability.
- Diversifies income sources for rural households.
- Strengthens water and food security.
6. Healthcare
- Healthcare Expenditure: Government spending on hospitals, medicines, preventive care, and medical workforce training.
Budget 2025
- Allocation: ₹98,311 crore.
- Focus on universal healthcare, insurance coverage, and infrastructure expansion.
- Supported improved access to medical facilities nationwide.
Budget 2026
- Allocation: ₹1.06 lakh crore, exceeding ₹1 lakh crore for the first time.
- Initiatives include NIMHANS 2.0 for mental health, affordable cancer treatment, and workforce training.
- Expanded public health coverage and preventive care programs.
Impact:
- Improves access to health services.
- Supports mental health and chronic disease management.
- Enhances overall public health capacity.
7. Education & Skill Development
- Skill Development: Training to increase employability and entrepreneurship.
- Education Funding: Investments in schools, colleges, vocational training, and digital literacy.
Budget 2025
- Allocation: ₹1.28 lakh crore.
- Focused on STEM education, vocational training, and higher education expansion.
- Promoted digital literacy and skills for future jobs.
Budget 2026
- Introduced AVGC labs in schools and colleges for Animation, Gaming, and Visual Effects.
- Supported National Institutes of Design and digital skill programs.
- Initiatives for girls’ hostels in STEM institutions and gender inclusivity.
Effect:
- Prepares youth for future careers in digital and creative industries.
- Bridges the skills gap between education and industry.
- Promotes inclusive education and gender equality.
8. MSMEs, Industry & Services
- MSMEs: Micro, Small, and Medium Enterprises that contribute to employment and economic output.
- Industrial Support: Government incentives to improve manufacturing and services competitiveness.
Budget 2025
- Focused on credit guarantee schemes and digital adoption.
- Supported domestic entrepreneurship and small businesses.
Budget 2026
- ₹10,000 crore SME Growth Fund introduced for scaling small businesses.
- TReDS mandated for CPSE purchases to improve cash flow.
- Duty and tax reforms supported exports, electronics, and high-tech manufacturing.
Impact:
- Encourages entrepreneurship and business growth.
- Improves liquidity and access to finance.
- Strengthens global competitiveness of Indian industries.
9. Energy, Environment & Technology
- Renewable Energy: Sustainable energy sources like solar, wind, and hydro.
- Green Technology: Environment-friendly solutions reducing carbon footprint.
Budget 2025
- Investments planned in urban renewable projects.
- Focused on clean energy infrastructure.
Budget 2026
- Incentives for battery storage systems, critical minerals, and clean energy.
- Support for semiconductor production and digital services.
- Expanded green technology adoption across sectors.
Effect:
- Strengthens energy security.
- Supports global competitiveness through technology adoption.
- Promotes sustainable development.
10. Social Welfare & Inclusive Growth
- Social Welfare: Programs for disadvantaged groups to improve quality of life.
- Inclusive Growth: Ensures all sections of society benefit from economic growth.
Budget 2025
- Supported urban and rural welfare programs.
- Included insurance for gig workers and employment initiatives.
Budget 2026
- Additional funding for housing, employment, and women-focused programs.
- Greater integration of welfare into economic opportunities and skill development.
Impact:
- Ensures equitable growth across society.
- Expands access to jobs and housing.
- Focuses on empowerment of women and marginalized groups.
Comparison Table: Budget 2025 Vs 2026 (Sector Wise)
| Sector | Budget 2025–26 | Budget 2026–27 |
| Fiscal Deficit | 4.4% of GDP | 4.3% of GDP |
| Total Expenditure | ₹50.65 lakh crore | ₹53.5 lakh crore |
| Capital Expenditure | ₹11.21 lakh crore | ₹12.2 lakh crore |
| Defence | ₹4.91 lakh crore | ₹5.94–7.84 lakh crore |
| Transport & Infrastructure | Major roads & rail funding | ₹5.98 lakh crore + high-speed rail & waterways |
| Agriculture & Rural | ₹1.71 lakh crore | ₹1.62 lakh crore + ₹95,692 crore VB‑GRAM |
| Healthcare | ₹98,311 crore | ₹1.06 lakh crore + mental health & cancer focus |
| Education & Skills | ₹1.28 lakh crore | AVGC labs, National Institutes of Design, STEM & girls’ hostels |
| MSMEs & Industry | Credit support & digital push | ₹10,000 crore growth fund, exports & electronics support |
| Energy & Technology | Renewable, urban projects | Battery storage, semiconductors, green tech |
| Social Welfare | Urban & rural schemes | Expanded employment, housing, women-focused programs |
Read This For detailed information :- Indian Union budget 2026: Key Highlights Of All Sectors.
Conclusion
This Union Budget 2025 vs 2026 comparison shows India’s shift from broad fiscal support toward targeted, sector-driven growth. While Budget 2025 focused on general relief measures, infrastructure expansion, and welfare support, Budget 2026 takes a more strategic approach, emphasizing technology adoption, skill development, and inclusive growth. Key highlights include record capital expenditure, stronger allocations for healthcare and education, enhanced support for MSMEs and rural development, and a clear push for green energy and modern infrastructure. Overall, Budget 2026 reflects a balanced approach, combining economic growth, fiscal prudence, and social welfare, setting the stage for a resilient and competitive India in the years ahead.
