‘Middle Class not crushed, economy expanding,’ says FM Nirmala Sitharaman, defending Union Budget 2026

Finance Minister Nirmala Sitharaman has countered the opposition party’s criticism of the Union Budget 2026, asserting that rising personal income tax collections reflect economic expansion and formalisation and not stress on India’s middle class.

FM Sitharaman defends Union Budget 2026

Speaking in response to attacks on welfare allocations and fiscal devolution, she said, “High personal income tax collections do not indicate that India's middle class is being ‘crushed’ or suppressed. Instead, these numbers reflect a significant expansion and formalisation of the economy.”

She described her ninth Budget as a long-horizon roadmap designed to sustain growth and investment rather than deliver short-term optics.

Rejecting claims that the Goods and Services Tax has made essential services costlier, Sitharaman clarified that milk, education, textbooks, healthcare and funeral services remain exempt.

She accused critics of distorting the tax structure to create unnecessary alarm.

The Finance Minister described the Budget as forward-looking, which aligns with the upcoming cycle of the 16th Finance Commission.

She outlined a strategy centred on early-stage public investment in sectors such as biopharma, biosimilars, semiconductors and carbon capture, arguing that technological leadership requires patient capital. 

Infrastructure development, she noted, now extends beyond highways to freight corridors and inland waterways to lower logistics costs and boost competitiveness.

Industry policy, she said, is aimed at helping medium-sized enterprises scale globally without losing policy support as they expand.

Employment measures across healthcare, tourism, caregiving, veterinary services and disability skilling were presented as targeted job multipliers, complemented by education reforms that integrate skills and entrepreneurship.

In agriculture, the government is advancing digital agri-stack systems and scientific crop practices to mitigate farmer risk.

Fertiliser subsidies amounting to Rs 1.71 lakh crore have been cleared to ensure supply stability, while fisheries and allied sectors are set for additional backing.

Fiscal projections estimate gross tax receipts at Rs 44.04 lakh crore and expenditure at Rs 53.47 lakh crore, with the deficit targeted at 4.3 per cent of GDP.

Resource transfers to states are pegged at Rs 25.44 lakh crore for 2026–27.

With food inflation below two per cent and free grain support continuing for 80 crore beneficiaries, Sitharaman framed the Budget as a stabilising anchor amid global uncertainty.

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