3 Things Unpacking the Union Budget 2026
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Feb 2, 2026 Udit Misra, political and economic analyst at The Indian Express, explains the Union Budget 2026 through a fiscal lens. He outlines why growth looks weaker, how supply-side fixes fell short, and why policy is shifting to revive consumption. He also discusses infrastructure priorities, tariff moves to aid exporters, and why small schemes cannot alone solve the jobs challenge.
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Supply-Side Reforms Haven't Solved Demand
- The government faces lingering supply-side issues from past shocks and structural banking problems.
- Early reforms aimed to unleash private investment but growth remained constrained by weak demand.
From Production Push To Consumption Boost
- The government shifted from a production-first approach to boosting consumption after demand failed to respond.
- Direct cash transfers and tax reliefs were deployed to stimulate household spending ahead of elections.
Nominal GDP Drives Budget Constraints
- Weak nominal GDP growth (sub-10%) tightened budget math and reduced the government's revenue-raising capacity.
- Many fiscal targets and spending plans shrink when nominal GDP underperforms, forcing tougher trade-offs.