The Union Budget for 2026-27, presented by Finance Minister Nirmala Sitharaman, projects Gross Tax Revenue (GTR) at Rs 44.04 lakh crore, marking an 8.0% growth over the revised estimate for 2025-26. Direct Taxes, including corporate and personal income tax, are the main contributors, making up 61.2% of the total gross tax revenue, estimated at Rs 26.97 lakh crore. Indirect taxes are expected to reach Rs 17.07 lakh crore.
In the Budget Estimate (BE) for 2026-27, the GTR to GDP ratio is set at 11.2%. This budget year also marks the beginning of the Sixteenth Finance Commission’s (SFC) award period, recommending a 41% share of devolution to the States from the divisible pool. Tax Revenues (Net to Centre) are forecasted at Rs 28.67 lakh crore, while Non-Tax Revenues (NTR) of the Central Government are projected at Rs 6.66 lakh crore.
The Revenue Receipts of the Union Government, including Tax Revenues (Net to Centre) and Non-Tax Revenues (NTR), are estimated at Rs 35.33 lakh crore, assuming a 5.7% growth over the revised estimate for 2025-26. The total expenditure of the Central Government for 2026-27 is expected to be Rs 53.47 lakh crore, representing 13.6% of the GDP, a 7.7% increase over the previous year’s revised estimate.
The Budget allocates Rs 12.22 lakh crore (3.1% of GDP) towards capital expenditure for the fiscal year 2026-27. This includes capital support to States through Special Assistance as Loan to States for Capital Investment (SASCI) with an outlay of Rs 2.0 lakh crore. The effective capital expenditure of the Union Government encompasses both its capital expenditure and grants-in-aid for creating capital assets, aimed at enhancing the economy’s productive capacity.
Under grants-in-aid for capital asset creation, the budget projects an allocation of Rs 4.93 lakh crore (1.3% of GDP) for 2026-27. Consequently, the effective capital expenditure in the fiscal year is estimated at Rs 17.15 lakh crore (4.4% of GDP).
