The Union Finance Minister, Smt. Nirmala Sitharaman, has presented the Union Budget for the financial year 2026–27 in Parliament today. It is indeed a matter of happiness that a person from Tamil Nadu has presented the budget for the ninth time.
The Finance Minister states that the budget contains action plans to transform India into a developed nation by 2047. However, the reality is that the benefits of economic growth have not reached all sections of the people so far.
At a time when geopolitical tensions, trade crises, and American tax policies pose serious threats to the Indian economy, it is disappointing that the Union Budget does not offer effective measures to face these challenges. Due to America’s “tax terrorism,” India’s economy is under severe pressure.
The budget claims that a trade agreement with the European Union will be a solution. But approval from 23 EU countries is required, and the agreement will come into force only in April 2027. There is no answer as to how India will tackle American tax aggression for the next one year.
The six sectors proposed to boost growth are not new; they have been mentioned in previous budgets as well. When the government is borrowing ₹11.7 lakh crore to manage the fiscal deficit, how can it move towards a 7 percent economic growth target?
It has been pointed out that inflation has remained stable during the 12 years of BJP rule. But the reality is that price rise has not been controlled. Even when global crude oil prices remain around 50 dollars, petrol and diesel prices have not been reduced.
The demand to increase the share of states in central taxes from the 41 percent recommended by the 16th Finance Commission to 50 percent has been rejected. This shows that the discriminatory approach of the Union Government in financial devolution continues.
The budget states that new technologies will be used to promote the manufacturing sector. But the manufacturing industry is already moving towards decline. The tax hike on the automobile sector will particularly affect Tamil Nadu, which is a major automobile manufacturing hub.
The textile industry in districts like Tiruppur, Coimbatore, Karur, and Erode— which contribute significantly to the country’s textile sector—has received no encouragement from this budget. There is also no solution for the problems faced by leather industries in Vellore, Ambur, and surrounding regions.
No proper remedies have been provided for the crisis faced by Micro, Small and Medium Enterprises (MSMEs), which generate large-scale employment. The allocation of merely ₹10,000 crore for MSME development is a negligible amount.
The announcement of new high-speed rail corridors such as Chennai–Bengaluru and Chennai–Hyderabad is welcome. However, it is regrettable that adequate funds have not been allocated for the pending railway projects in Tamil Nadu. There is also no announcement regarding metro rail projects for cities like Coimbatore, Madurai, and Tiruchirappalli.
Though there are some welcome measures—such as reduction of TDS for education and healthcare from 5 percent to 2 percent, tax exemption for motor accident compensation, exemption of basic customs duty for 17 cancer medicines, and reduction of import duty on medicines for seven rare diseases—the Union Budget does not fulfill the expectations of the people and remains largely disappointing.
Vaiko
General Secretary,
Marumalarchi DMK
‘Thayagam’, Chennai – 8
01.02.2026