Prof. Madan Mohan Goel, Propounder Needonomics & Former Vice-chancellor (Thrice)
The Union Budget 2026–27, presented by the Finance Minister (FM) Smt. Nirmala Sitharaman, with a budget size of ₹53,47,315 crore, including ₹41,25,494 crore as revenue expenditure and ₹12,21,821 crore as capital expenditure, marks a significant milestone in India’s journey towards becoming a Viksit Bharat by 2047. Presented on the auspicious occasion of Magha Purnima and the birth anniversary of Guru Ravidas, the Budget symbolically reinforces the Needonomics philosophy of “growth with goodness.”
The Finance Minister’s 62-page speech, structured across 177 headings, reflects ambition, continuity, and reformist intent. Highlighting that over 350 structural reforms have already been undertaken, she reaffirmed that the “Reforms Express” will continue with confidence, balancing economic momentum with social inclusion. The Budget is anchored in three Kartavya (duties):
Accelerating and sustaining economic growth,
Fulfilling the aspirations of people while building national capacity, and
Ensuring equitable access to resources for every family, community, and region.
The budget’s emphasis on investment, innovation and inclusion (3I) forms a necessary tripod for sustaining India’s growth momentum and aligns well with the Needonomics mandate of need-based, efficiency-oriented development rather than growth for its own sake with cautious optimism.
Growth Strategy and Manufacturing Push
Under the first Kartavya, the Budget emphasizes scaling up manufacturing across seven strategic and frontier sectors, supported by continuous, adaptive, and forward-looking reforms. The Finance Minister underlined that cutting-edge technologies—particularly Artificial Intelligence (AI)—can act as powerful growth multipliers, while reaffirming India’s commitment to deep integration with global markets.
A notable positive is the composition of expenditure growth. Capital expenditure in 2026–27 is projected to grow by 11.5% over the revised estimates of 2025–26, compared to a 6.6% increase in revenue expenditure. This signifies an infrastructure-led development strategy, consistent with sound macroeconomic principles, wherein capital expenditure growth should outpace revenue expenditure to strengthen productive capacity.
The growth strategy is not without stress points as cooperative federalism appears strained as states are entrusted with critical responsibilities—healthcare delivery, education reform and climate resilience without a commensurate expansion in fiscal autonomy or predictable revenue streams. This imbalance risks weakening the foundation of inclusive growth, since states are primary agents of last-mile governance.
Key Announcements Welcomed by the Needonomics Think Tank
From a Needonomics perspective, several proposals—especially in education, skills, technology, and services—are commendable.
Artificial Intelligence received unprecedented emphasis, with eleven explicit references in the Budget speech. AI is envisioned as a force multiplier for governance, service delivery, and economic inclusion. Key initiatives include Bharat-VISTAAR, a multilingual AI platform promoting linguistic inclusion; AI integration with AgriStack and ICAR packages for agriculture; AI-enabled healthcare solutions and assistive devices for Persons with Disabilities through ALIMCO; advanced imaging and non-intrusive scanning for customs and security; embedding AI in school curricula and teacher training; professional upskilling; and AI-driven employment matching platforms. The AI Mission and National Quantum Mission further reinforce India’s long-term technological ambition.
Other notable initiatives include:
A High-Powered “Education to Employment and Enterprise” Standing Committee to strengthen the services sector, targeting a 10% global share by 2047.
Establishment of a new National Institute of Design in Eastern India, addressing the chronic shortage of trained designers.
Creation of five University Townships near major industrial and logistics corridors to integrate education, research, skills, and industry.
Establishment of one girls’ hostel in every district through VGF/capital support, promoting gender equity in higher education, particularly in STEM fields.
Development of four major telescope infrastructure facilities, including the National Large Solar Telescope and the Himalayan Chandra Telescope, to advance astrophysics and astronomy.
Additionally, initiatives such as upskilling 20,000 tourist guides in major tourism hubs and exemption on motor accident compensation payments are welcome steps toward employment generation and ease of living, though the neglect of tourism development in Kurukshetra remains a notable omission.
Needonomics Concerns: Fiscal Prudence and Ethical Economics
Despite these positives, the Needonomics Think Tank raises serious concerns regarding fiscal sustainability. The fiscal deficit for 2026–27 is projected at 4.3% of GDP (₹16.96 lakh crore)—significantly above the 3% target mandated under the FRBM Act. Persistent deviation from this benchmark poses risks to long-term macroeconomic stability.
Equally troubling is the expenditure composition. Nearly 20% of every rupee spent goes toward interest payments, a non-productive expenditure that crowds out developmental priorities. Furthermore, borrowings and other liabilities constitute about 24% of government receipts, intensifying inter-generational fiscal stress.
On the revenue side, the Budget documents reveal that government receipts comprise 24% borrowings and liabilities, followed by income tax (21%), corporate tax (18%), and non-tax revenues including disinvestment (10%). It must be emphasized that only about 2.2% of India’s population pays taxes. This responsible minority deserves recognition and equitable access to quality public services, if not direct concessions.
On the expenditure front, allocations include 20% for interest payments, 22% for states’ share of taxes, 11% for defence, 17% for central sector schemes, and 8% for centrally sponsored schemes. Subsidies and pensions account for 6% and 2%, respectively, with the remaining 7% allocated to other expenditures.
Fiscal prudence, too, remains a delicate balancing act. While capital expenditure continues to drive investment-led growth, revenue mobilization has not kept pace with rising developmental commitments.
The “play-it-safe” approach prioritizing stability but its resilience will be tested as India seeks to transition from a large domestic-market economy to a globally competitive industrial and innovation hub.
Towards a Gita-inspired Needonomics Framework
For realizing Needo-Happiness and Needo-Health for the masses—not merely the classes—there is an urgent need to adopt a Gita-inspired Needonomics approach, treating economics as “economic yog.” This framework emphasizes ethical restraint, balance, and well-being over unbridled material expansion.
India’s growth challenge is not merely fiscal but behavioral and cultural. A healthy economy growing at 7% requires transforming citizens from careless and cared-less to careful, and from useless and used-less to useful—making them active stakeholders in nation-building. This demands mindful consumption (needo-consumption) and a cultural shift toward needo-saving, especially as India’s domestic savings rate continues to lag behind China’s by nearly 10%.
For agriculture, a “rainbow revolution”—focused on productivity, agro-processing, and agro-exports—must be jointly pursued by the Centre and States. Reducing the compliance burden requires adherence to Dr. B.R. Ambedkar’s principles of public expenditure: faithfulness, wisdom, and economy in execution.
Resolving the Consumption–Investment Paradox
One of the most critical challenges on India’s path to Viksit Bharat is the Consumption–Investment Paradox. Growth cannot be sustained solely through supply-side investments without strengthening demand-side fundamentals. The Needonomics perspective asserts that consumption must align with genuine human needs, thereby creating inclusive demand and ensuring that investments translate into broad-based welfare rather than concentrated wealth.
Conclusion
The Union Budget 2026–27 provides momentum, intent, and ambition for India’s developmental journey. Its ultimate success, however, will depend on aligning growth with ethical governance, fiscal discipline, and human happiness—the core mandate of the Needonomics School of Thought. Addressing the Consumption–Investment Paradox through need-based consumption, ethical savings, and inclusive investment will be crucial for realizing a prosperous, resilient, and humane Viksit Bharat by 2047. Going forward, sustaining growth with goodness require calibrated courage—strengthening state finances, deepening revenue reforms, and ensuring innovation serves genuine societal needs.
