Skip to content
General / Financial Awareness · 3-5 Qs

Economy & Union Budget

Read the notes once, then practise. Every question shows the full solution right after you answer.

Study notes

Economy and Union Budget - Revision Sheet

3-5 questions: latest Budget numbers, constitutional articles on public finance, and landmark economic reforms. Budget figures below are from the Union Budget 2026-27 presented on 1 February 2026.

1. Union Budget 2026-27 - headline numbers (BE)

Item2026-27 BEComparison
Fiscal deficit4.3% of GDP (about Rs 16.9 lakh crore)4.4% in 2025-26 RE
Primary deficitAbout 0.7% of GDP-
Total expenditureAbout Rs 53.5 lakh croreRs 49.6 lakh crore in 2025-26 RE
Capital expenditureAbout Rs 12.2 lakh croreAbout Rs 11 lakh crore in 2025-26 RE
Effective capital expenditureAbout Rs 17.15 lakh crore (about 4.4% of GDP)-
Non-debt receiptsAbout Rs 36.5 lakh croreRs 34 lakh crore in 2025-26 RE
Net tax receipts of the CentreAbout Rs 28.7 lakh croreRs 26.7 lakh crore in 2025-26 RE
Gross market borrowingAbout Rs 17.2 lakh croreNet from dated securities about Rs 11.7 lakh crore
Central government debt55.6% of GDP56.1% in 2025-26 RE; target 50 plus/minus 1% by 2030-31
Nominal GDP growth assumedAbout 10%-

2. Budget 2026-27 - key announcements

  • Framed around three Kartavyas: accelerate and sustain growth; build people's capacity; ensure resources and opportunities for every family, region and sector.
  • Ninth consecutive Budget of Finance Minister Nirmala Sitharaman; no change in income tax slabs.
  • Income-tax Act, 2025 comes into force on 1 April 2026, replacing the 1961 Act.
  • High Level Committee on Banking for Viksit Bharat to review the banking sector; restructuring of PFC and REC.
  • Biopharma SHAKTI: Rs 10,000 crore over 5 years; 3 new NIPERs, 7 upgraded, 1,000+ clinical trial sites.
  • India Semiconductor Mission 2.0; Electronics Components Manufacturing Scheme raised to Rs 40,000 crore.
  • Seven high-speed rail corridors (e.g. Mumbai-Pune, Delhi-Varanasi, Varanasi-Siliguri); Dankuni-Surat dedicated freight corridor; 20 new National Waterways in 5 years.
  • Rs 10,000 crore SME Growth Fund; rare earth corridors; three chemical parks.
  • TCS on LRS for education/medical and on overseas tour packages cut to 2%; STT on futures raised to 0.05%.
  • Tax holiday till 2047 for foreign firms providing cloud services through Indian data centres.

3. Finance Commission

CommissionChairStates' share
1st (1951)K.C. Neogy-
14thY.V. Reddy42%
15thN.K. Singh41%
16th (2026-31)Arvind Panagariya41% retained

4. Constitutional provisions on public finance

ArticleSubject
110Definition of Money Bill
112Annual Financial Statement (Budget)
113 / 114Demands for grants / Appropriation Bill
246A / 279AGST law-making power / GST Council
266Consolidated Fund and Public Account of India
267Contingency Fund (at the disposal of the President)
270Taxes levied and distributed between Union and States
280Finance Commission
360Financial emergency

5. Budget history

  • First budget of British India: James Wilson, 1860 (he also introduced income tax - 24 July is Income Tax Day).
  • First budget of independent India: R.K. Shanmukham Chetty, 26 November 1947.
  • Most budgets presented: Morarji Desai (10).
  • Railway Budget separated in 1924 (Acworth Committee) and merged with the Union Budget in 2017; Budget date advanced to 1 February from 2017.
  • FRBM Act: 2003; N.K. Singh review committee (2017) recommended debt as the anchor.

6. Reforms and institutions

ReformKey facts
GST1 July 2017; 101st Amendment Act, 2016; Council chaired by Union FM
GST 2.022 September 2025; main slabs 5% and 18%; special 40% for sin/luxury goods (56th Council meeting)
NITI Aayog1 January 2015, replaced the Planning Commission (1950); chaired by PM
Labour CodesFour codes in force from 21 November 2025, replacing 29 laws
8th Pay CommissionChair Justice Ranjana Prakash Desai; constituted November 2025

7. Data and growth

  • Economic Survey 2025-26 (29 January 2026): growth of 6.8%-7.2% projected for 2026-27; potential growth about 7%. Prepared by the Economic Division, DEA, under CEA V. Anantha Nageswaran.
  • New GDP series: base year 2022-23, released 27 February 2026 (old base 2011-12).
  • New CPI series: base year 2024 (basket of 358 items). IIP is also moving to base 2022-23.
  • CPI is compiled by NSO (MoSPI); WPI by the Office of the Economic Adviser, DPIIT.
  • RBI's October 2026 projections for 2026-27: real GDP growth 7.1%, CPI inflation 5.2%.
Difference to remember: capital expenditure (Rs 12.2 lakh crore) vs effective capital expenditure (Rs 17.15 lakh crore, which adds grants to states for creating capital assets).
Free SBI Clerk practice with solutionsStart free →