By Nageshwar Patnaik in Bhubaneswar, February 20, 2026: Union Finance Minister, Nirmala Sitharaman notched up a record of sort by presenting 9th consecutive union budget in the Lok Sabha. She also has a dubious record of consistently increasing capital expenditure at the expense of social sector spending, such as education and health. By doing so, she has not addressed the primary objectives of the Budget i.e reducing inequality in terms of earnings and wealth generation, generation of employment opportunities, proper management of the public enterprises, contributing to the economic growth of the country.

If we go by the general consensus, the budget for 2026-27 was not bad, but not good enough. It didn’t rock the boat as it has made an attempt to keep the ship on course to India’s goal of achieving ‘Viksit Bharat’ by 2047. However, it did not address the strategic vulnerabilities of the Indian economy highlighted in the Economic Survey. India certainly has emerged as the world’s fastest-growing major economy, but does that growth truly reach the common citizen?

In fact, the country remains one of the world’s most unequal. We all see an extreme concentration of economic power—through wealth and corporate dominance, which is now a defining feature of the economy, with 1% of Indians cornering 40% of national income.

It is truism to say that the basic rationale of growth is to improve the living conditions of the masses, but the present government has done little in this direction. Civil society organization Oxfam India’s 2023 report titled ’Survival Of The Fittest’ said post-pandemic India’s bottom 50%—roughly 70 crore people—received only 13% of national income and owned less than 3% of the country’s total wealth. Similarly, a report commissioned by the South African presidency of the G20 in 2024 said India’s richest 1% expanded their wealth by 62% between 2000 and 2023.

Gross Domestic Product (GDP) figures mean little to ordinary Indians. The stark reality is that 80 crore people still depend on government food support, jobs remain scarce, incomes lag behind rising prices, and inequality is widening. Concentration of wealth among India’s ultra-rich is worse than in the US, Brazil and South Africa. SEBI data clearly points out that less than 10% of Indian households invest in stock markets, exposing the gap between market boom and mass prosperity.

However, the Narendra Modi government insists that macroeconomic fundamentals are strong and poverty is declining. The moot question – if growth is so robust, why does everyday hardship persist? Now, India’s social sector budget as a share of the GDP is the second lowest in over a decade, and lower even than 2014-15, when late FM Arun Jaitley presented the NDA government’s maiden budget. For 2026-27, the finance minister has allocated 18% of expenditure to the social sector. Taken as a share of the GDP, the sector received 2.5%, lower even than 2014-15. Even prior to the pandemic, the share of social sector spending did not see an increase.

For instance, public health spending by the Centre remains stuck at just 0.27 per cent of GDP, while education spending stands at 0.35 per cent of GDP, far below the long- promised 6 per cent target under the National Education Policy. The National Health Policy (NHP), 2017 set a target of increasing total public health expenditure (including that of states) to 2.5% of GDP by 2025. Spending, however, remains lower at 1.7% of GDP 2024-25 REs, as per the Economic Survey 2025.

Despite the government’s own admission that more than 80 crore people continue to depend on the public distribution system, the allocation for the Pradhan Mantri Gareeb Kalyan Anna Yojana amounts to only 0.63 per cent of GDP. India’s GDP growth has averaged about 6% over the last three decades, lifting approximately 40 crore people out of poverty. But the income inequality has sharply increased since 1980 widening gap between the top 10% of the population and the bottom 50% in these years, according to the latest World Inequality Report (2026).

The WIR rightly underscores the importance of tax justice to inculcate confidence among people that the system is fair in taxing the richest appropriately. During this period, the number of billionaires has shot up from 109 in 2014 to 334 now. Jaitley abolished wealth tax in his budget of 2015-16 by citing poor collection. It was a definitely a regressive step. French economist Thomas Piketty in a research article has brought out how a mere two per cent wealth tax on people with a net worth above Rs 10 crore and an inheritance tax will generate 2.7% of the GDP of India. As a sensible step towards tax justice, it was expected of Sitaraman to impose 2% wealth tax on the super-rich.

The policy choice the government made in the immediate post-pandemic era was to stimulate the economy through enhanced capital expenditure. Inevitably, therefore, the axe has fallen on revenue expenditure, through which the government’s social sector spending takes place. Revenue expenditure dropped from 11.83% of GDP in FY23 to 10.83% in the current financial year (FY26), and is projected to decline further in FY27 to 10.5%. These cuts have ensured that allocations in most flagship schemes have either seen dramatic cuts or broadly stayed stagnant.

For FY26, centrally sponsored schemes saw cuts amounting to 0.34% of GDP in the Revised Estimate over the Budget Estimate of 1.52% of GDP. The most dramatic cut was in the Jal Jeevan Mission that had a budgeted expenditure of Rs 67,000 crore, which was revised down to Rs 17,000 crore for this fiscal year. Allocations for the ministry of education are nearly stagnant — from Rs 121,949 crore Revised Estimate (FY26) to Rs 139,289 crore Budget Estimate (FY27).

Nirmala Sitharaman’s Budget 2026-27 is devoid of any substantial policy commitment or allocations to social sector. The Modi government’s failure to prioritise social spending will deepen the challenge for the Indian economy rather than enable it to be truly amanirbhar (self-reliant) against the growing turmoil around the world.