Union Budget Forecasts 8% Rise In Tax Collections At ₹44.04 Lakh Crore

The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, projects gross tax collections at ₹44.04 lakh crore.

This marks an 8% increase over the revised estimate of 2025-26.

Direct taxes, including corporate and personal income levies, dominate revenue sources at ₹26.97 lakh crore. They contribute 61.2% of the total tax receipts.

The government expects to collect ₹17.07 lakh crore from indirect taxes.

The budget anticipates the Gross Tax Revenue (GTR) to GDP ratio at 11.2% for the fiscal year.

This year marks the beginning of the award period of the Sixteenth Finance Commission (SFC). The SFC recommends that the Centre maintain the states’ share of devolution at 41% of the divisible pool.

The Centre expects to collect ₹28.67 lakh crore in net taxes. The Central Government anticipates earning ₹6.66 lakh crore from non-tax revenues.

The government expects total revenue receipts, including net tax revenue and NTR, to reach ₹35.33 lakh crore. This represents a 5.7% growth over the revised estimate of 2025-26.

The Centre plans total expenditure of ₹53.47 lakh crore, equal to 13.6% of GDP. This reflects a 7.7% increase over the revised estimate of ₹49.65 lakh crore.

Capital Spending and Investments

The government has set capital expenditure at ₹12.22 lakh crore, around 3.1% of GDP.

This includes ₹2 lakh crore allocated for the Special Assistance as Loan to States for Capital Investment (SASCI).

Effective capital expenditure, which combines government capital outlays and grants-in-aid for asset creation, strengthens the country’s productive capacity.

The government estimates grants-in-aid for building capital assets at ₹4.93 lakh crore, or about 1.3% of GDP.

The government projects total effective capital expenditure for FY 2026-27 at ₹17.15 lakh crore, or 4.4% of GDP.

These investments aim to enhance infrastructure, modernise public assets, and boost long-term economic growth.

The Union Budget 2026-27 signals a disciplined fiscal approach and encourages private investment.

It maintains robust Centre-State cooperation and reinforces India’s growth momentum.

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