Union Budget 2026 – Artifex.News

Union Budget 2026: Activists slam allocation for rural jobs schemes

admin — Mon, 02 Feb 2026 20:11:00 +0000

The Budget has earmarked ₹95,692.31 crore for VB‑GRAMG and ₹30,000 crore for MGNREGS. File
| Photo Credit: RAO GN

Civil society groups and rural employment activists have criticised the Union Budget’s allocations for rural job schemes, alleging that the government has offered little clarity on the transition from the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to the new Viksit Bharat‑Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB‑GRAMG) framework, and that the promised 125 days of employment cannot be financed with the outlay provided.

The Budget has earmarked ₹95,692.31 crore for VB‑GRAMG and ₹30,000 crore for MGNREGS, taking the combined allocation for the two rural employment heads to ₹1,25,692.31 crore, which the government has projected as a 43% increase over the Revised Estimate (RE) of ₹88,000 crore for MGNREGS in 2025‑26.

However, Nikhil Dey, founder member of the Mazdoor Kisan Shakti Sangathan (MKSS) and a key architect of MGNREGS, said the Budget “creates confusion about the transition to the new law and its real implications.” He argued that the ₹30,000 crore provision for MGNREGS is particularly opaque. “While it has not been made clear what the ₹30,000 crores allocation to MGNREGA is meant to fund,” he said, adding it may be used either to clear liabilities and wind down the programme or to run a short transition period.

Mr. Dey contended that even a transition cushion appears unlikely because of pending dues and near‑term spending. “There are current dues of about ₹15,000 crore. Additionally, there is likely to be an expenditure of about 15000 crores in the next two months. Therefore, the MGNREGA ₹30,000 crore allocation seems to have no relevance for next year,” he said.

Mr. Dey flagged unresolved operational questions, including when MGNREGA will formally end, when its repeal will be notified, when VB-G RAMG will start, and when its guidelines—especially on cost‑sharing and state‑wise normative allocations—will be brought into effect”. He warned that States are being forced to budget “in the dark” without knowing their required 40% share until the Centre discloses allocations. “On paper, the Centre appears to have completed its role by fixing its budget share, but has left major implementation and funding burdens on States, making the actual functioning of VB-GRAMG highly uncertain,” he said.

The NREGA Sangarsh Morcha (NSM), a coalition of organisations working with MGNREGS workers, echoed those concerns. “The Budget speech and documents aggravate the Modi Government’s lack of transparency on VB‑GRAMG,” it said, pointing out that the Finance Minister’s 90‑minute Budget speech did not mention either MGNREGS or VB‑GRAMG and the Budget documents provided “no indication whatsoever of where and when VB‑GRAMG is to be notified, what the state‑wise ‘normative allocations’ are likely to be, or how the transition is to take place.”

NSM described the 125‑day guarantee claim as untenable at current funding levels. “The 125‑day promise of the VB‑GRAMG Bill is nothing but an eyewash. The budget allocation is a mere 42% of what will be required actually to finance this guarantee,” it said, estimating that to provide 125 days of work even to active households, the total outlay would need to be about ₹3.84 lakh crore, with the Centre’s share at roughly ₹2.3 lakh crore. It added that if the Centre’s VB‑GRAMG figure is treated as a 60% share, the total programme envelope would be about ₹1.59 lakh crore, which could translate to only around 52 days of work for active households, far below the promised 125.

Activists warned that without clear transition rules, timely disclosure of State‑wise norms, and adequate funding, rural workers could face uncertainty over job availability and payment timelines during the shift to the new regime.

Published – February 02, 2026 05:35 pm IST

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Rise in southern States’ share in devolution of funds provides no relief to Tamil Nadu

admin — Mon, 02 Feb 2026 18:54:00 +0000

People watch the Union Budget 2026-27 being presented by Union Finance Minsiter Nirmala Sitharaman on February 1, 2026. Veteran experts in public finances say Tamil Nadu has got virtually nothing extra.
| Photo Credit: The Hindu

Despite five southern States being assigned a collectively higher share under the vertical distribution scheme of the 16th Finance Commission (FC) than in the past, Tamil Nadu’s share has seen only a marginal rise.

The share of Tamil Nadu, which was 4.079% in the 15th FC, rose to 4.097% now, accounting for a rate of increase of 0.44%. This was followed by Telangana with a rise of 3.43% and Andhra Pradesh with 4.2%. Only Karnataka and Kerala have witnessed a double-digit rate of increase — 13.27% and 23.74%. At the all-India level, Kerala’s degree of rise is only next to Haryana’s 24.52%, while the third slot goes to Karnataka.

16th Finance Commission report tabled, states’ tax share retained at 41%

The Centre’s decision to retain States’ share in the common pool of taxes at 41% for 2026–31 has sparked criticism from opposition leaders. Finance Minister Nirmala Sitharaman tabled the Sixteenth Finance Commission report in the Lok Sabha on February 1, 2026, setting the framework for tax devolution between the Centre and States. Several States, including Karnataka and Kerala, had sought a higher 50% share, citing rising fiscal responsibilities.
| Video Credit:
The Hindu

Published – February 03, 2026 12:24 am IST

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Watch: Union Budget 2026 | The big economic priorities explained

admin — Mon, 02 Feb 2026 15:35:00 +0000

Finance Minister Nirmala Sitharaman on February 1st presented her ninth Union Budget — and the third of the Narendra Modi government’s third term

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Watch: Union Budget 2026 | Key takeaways

admin — Mon, 02 Feb 2026 15:33:00 +0000

Finance Minister Nirmala Sitharaman on Sunday (February 1, 2026) announced a slew of measures to boost manufacturing, a tax holiday for global data centres, and incentives for the agriculture and tourism sectors as she unveiled a ₹53.5 lakh crore Budget seen as a long-term blueprint for sustaining growth amid rising global risks.

Edit: Naveen

Published – February 01, 2026 10:37 pm IST

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Government proposes to exempt award given by Motor Accident Claims Tribunal from income tax

admin — Mon, 02 Feb 2026 13:21:00 +0000

Finance Minister Nirmala Sitahraman on Sunday (February 1, 2026) proposed a tax exemption on awards given by the Motor Accident Claims Tribunal in the Union Budget 2026-27.

According to the Budget document, the provisions of the Motor Vehicles Act, 1988, inter alia, provide for compensation and an interest on the compensation to be awarded by the tribunal to an individual or his/her legal heir, on account of death or permanent disability or any bodily injury under the said Act.

“In order to alleviate sufferings of victims of such accident and their family, which may cause extreme hardship to the aggrieved person and family, it is proposed to amend the said Schedule to provide exemption to an individual or his legal heir, on any income in the nature of interest under the Motor Vehicles Act, 1988,” it said.

The document said these amendments will take effect from April 1, 2026, and shall accordingly apply in relation to the tax year 2026-27 and subsequent tax years.

It also said that no tax is to be deducted at source in respect of interest on compensation amount awarded by a Motor Accidents Claims Tribunal to an individual.

“In order to provide relief to the individual and to alleviate the hardship caused due to accident, it is proposed that no tax shall be deducted at source in respect of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal to an individual,” the document said.

The amendment will take effect from April 1, 2026.

Published – February 02, 2026 04:36 am IST

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India’s Budget advances critical reforms across customs and strategic sectors that boost investment: USISPF

admin — Mon, 02 Feb 2026 11:55:00 +0000

The U.S.-India Strategic Partnership Forum (USISPF) has welcomed the Union Budget 2026-27, saying its focus on technology-driven reforms, sectoral competitiveness and trade facilitation enhances the country’s attractiveness as a global investment destination.

Minister of Finance and Corporate Affairs Nirmala Sitharaman presented the Union Budget on Sunday (February 1, 2026).

Also Read: Union Budget 2026-27 | Industry reactions

USISPF commended the Indian Government for delivering a “progressive and comprehensive fiscal framework that supports sustained growth, job creation, and enhanced ease of doing business.

“The Budget’s focus on technology-driven reforms, sectoral competitiveness, and trade facilitation aligns strongly with USISPF’s priorities and enhances India’s attractiveness as a global investment destination,” it said in a statement.

President and CEO of USISPF Mukesh Aghi said in the statement that the Budget advances critical reforms across customs, taxation, and strategic sectors that enhance competitiveness, boost investment, and modernise India’s economic architecture.

Also Read: Credible and creditable | On Union Budget 2026-27

“The support for semiconductors, electronics manufacturing, healthcare, agriculture, and logistics will help fuel next-generation growth. The Government’s banking initiative is also a key enabler for capital intermediation and investment, ensuring that financial resources flow efficiently to fuel growth across sectors,” he said.

USISPF particularly welcomed the Finance Minister’s announcement introducing a long-term tax holiday for cloud services provided through local data centres.

“This landmark policy has the potential to do for India’s cloud and data centre ecosystem what the IT services incentives did in the early 2000s, catalyse large-scale global investment, expand export revenues, and drive long-term job creation and capability development,” Mr. Aghi said.

“Industry also welcomes the measures announced to nurture the local AI, IT, and data centre ecosystem. By incentivising investment, supporting infrastructure, and promoting innovation, these initiatives will strengthen India’s technology ecosystem, enhance competitiveness, and position the country as a global hub for advanced digital services,” he said.

He added that while the Budget delivers significant policy progress, USISPF remains committed to working closely with the Government to address ongoing industry priorities, including strengthening skills development, accelerating dispute resolution, and enhancing infrastructure and financial sector frameworks. “We look forward to a constructive dialogue to ensure that India’s growth journey remains inclusive, forward-looking, and globally competitive,” he said.

USISPF particularly welcomed the comprehensive customs reforms, reflecting a “strong” commitment to modernising trade processes and strengthening logistics efficiency.

The rollout of end-to-end digital and technology-enabled solutions including AI-powered non-intrusive inspection, phased scanning of all containers at major ports, and extension of the Single Window mechanism to express cargo will enhance transparency, reduce dwell times, and streamline cargo movement, it said.

On the tariff front, USISPF said targeted customs duty rationalisation supports India’s manufacturing and energy transition priorities.

Export sectors such as leather and footwear receive extended duty-free input windows, while baggage duty for personal imports has been rationalised from 20% to 10%.

“These measures are expected to reduce input costs for sunrise sectors, simplify the tariff structure, and strengthen India’s export competitiveness,” it said.

USISPF welcomed significant reforms in direct taxation and transfer pricing, including simplification of transfer pricing and safe harbour rules to enhance competitiveness and reduce litigation for the IT services sector and Global Capability Centres (GCCs).

Key reforms include broadening safe harbour eligibility to ₹2,000 crore, consolidating all IT services into a unified category with a 15.5% safe harbour margin, automating approvals to reduce direct tax interface, and fast-tracking Advance Pricing Agreements (APAs) within a two-year timeline extendable by six months.

The extension of the modified return facility is expected to improve predictability and encourage investment, it said.

Noting that the Budget provides a long-term tax holiday until 2047 for cloud services provided through local data centres, USISPF said the policy has the potential to catalyse large-scale global investment, expand export revenues, and drive long-term job creation and capability development.

Industry also welcomes measures announced to nurture the local AI, IT, and data centre ecosystem, which will strengthen India’s technology ecosystem, enhance competitiveness, and position the country as a global hub for advanced digital services.

Beyond customs and tax reforms, the Budget emphasises key sectoral focus areas including healthcare, skills development, semiconductors, electronics manufacturing, logistics, and agriculture and allied services. Notably, India Semiconductor Mission 2.0 and a ₹40,000 crore PLI scheme for electronics signal sustained support for high technology manufacturing and supply chain development.

The Government has also announced a high-level committee on Banking to review the banking sector’s structure, efficiency, and preparedness to support India’s next phase of growth while safeguarding financial stability, inclusion, and consumer protection. This initiative is critical for strengthening capital intermediation, mobilising resources efficiently, and enabling investment that drives broad-based economic growth.

Published – February 02, 2026 04:04 pm IST

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Some Assumptions Make No Sense

admin — Mon, 02 Feb 2026 11:27:00 +0000

Budget 2026: Finance Minister Nirmala Sitharaman unveiled Modi 3.0’s Budget 2026 on Sunday, Feb. 1 with India Inc calling it a ‘non-event’ afetr no major announcements were made for income tax slabs or sector-specific allocations. According to Neelkanth Mishra, Chief Economist and Head-Global Research of Axis Bank, some of the macroeconomic and fiscal projections made in Budget 206-27 could pose a challenge for the government to tackle the financial system going further.

ALSO READ: Budget 2026: FM Sitharaman Allocates Rs 12.2 Lakh Crore For Capex

Axis Bank’s Neelkanth Mishra On Budget 2026

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Fiscal Projections In Budget 2026

”As a result of that, the gross borrwoing target has turned out to be higher than what bond markets expected and yields have actually gone up when they should have been going down,” he added. Explaining the fiscal math, Mishra said it is a two step process. ”I don’t see a challenge with fiscal math, by assuming 10% nominal GDP growth, even 10-and-a-half is possible. An improvement is likely in the coming year as the government has adequate buffer. Even if there is a signficant slowdown in global economy or if a war pushes up global crude oil prices, some buffers exist in the fiscal math itself,” he added.

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India’s Budget advances critical reforms across customs and strategic sectors that boost investment: USISPF

admin — Mon, 02 Feb 2026 10:34:00 +0000