As the union Budget is expected to be present on Feb 1,
2026, as commerce students should understands some basic of Budget
Basics:
- 1.
India’s Budget is a Deficit
budget.
- 2.
Budget Documents: Union Budget
comprises of Part A and Part B. Part A is more of Macro Aspect of the Economy
and New Schemes and Government’s Priority
- 3.
Part B deals with tax proposal,
which has a direct bearing on personal and family finance.
From 1860 to Liberalization: A Brief History of
Indian Budgets
—
On 7th
April, 1860, India’s first budget was presented by James Wilson of East
India Company to the British Crown.
—
Independent
India’s first budget was presented by India’s first Finance Minister R.K.
Shanmukham Chetty, 5 pm on 26th November, 1947.
—
The
budget presented by Manmohan Singh in 1992-93 is often hailed as the most
important budget of India ever created.
—
He
reduced import duty from 300% to 50%, which liberalized Indian economy, and the
modern IT industry owes much of its presence to that decision.
Halwa Ceremony-
1.Halwa
ceremony denote a lock-In –Period for more than 100 officials who are invoved
in making and Printing budget .
2. 2 For 8
to 10 days, the officials stay in complete isolation
3. 3No
calls are allowed/ No internet
4. 4.These
officials cannot contact their families for these days.
5. 5. All
will be under CCTV surveillance and Closely monitored by Intelligence
Bureau(IB)
Common Factors Common Man Will Pay
Attention To:
1. 1.
Fiscal Deficit
Fiscal Deficit represents the gap between the
government’s total expenditure and its total non-borrowed receipts (revenue +
non-debt capital receipts). Put it simply, it is the difference between income
and spending by the government. Ideal fiscal deficit is 4.5% or less. Higher
the deficit budget, higher the inflation and interest rate. As a commerce students, look for this number
to understand the health of our economy.
2.
Direct Tax
This is a factor which an
individual pay attention to. The direct tax is a tax levied on an income and
wealth of individuals.
In the Union Budget, all our eyes will be on Income Tax slabs rates exemptions, and the
choice between the "Old" and "New" Tax Regimes. The
reason is so simple that if tax rates are lowered, people have more money to spend, which boosts demand in the
economy. Conversely, higher taxes can slow down consumption.
3. Indirect Tax
While GST rates are now decided by the GST Council,
the Union Budget still focuses on Customs Duty (taxes on
imports and exports). Changes in Indirect Taxes are often used as a tool for
the "Make in India" initiative. By increasing customs duty on
finished electronic goods and reducing it on raw materials, the government
encourages domestic manufacturing. For consumers, these changes determine
whether items like mobile phones, gold, or electric vehicles will become
cheaper or more expensive. It is a key area for students interested in supply
chain and international trade.
4. Deduction u/s 80C
Section
80C of the Income Tax Act is the most popular tax-saving tool for individual taxpayers in India. It allows for a
deduction of up to ₹1.5 lakh from total taxable income for investments in
specific instruments like PPF, LIC, ELSS, and NSC. Every year, taxpayers hope
for an increase in this limit to account for inflation.
Examples:
Insurance Premium. Tuition Fees, PF contribution and Post Office Saving Scheme
etc. If this amount is raised, there will be more money left in the hands of
salaried class for spending and finally will boos overall economic growth.
5. Corporate Tax
Corporate Tax is the tax paid by businesses on
their annual profits. The government uses this rate to remain globally
competitive and attract Foreign Direct Investment (FDI). Lowering corporate tax
rates leaves companies with more "retained earnings," which can be
reinvested into expanding operations, leading to job creation. Commerce
students should also look for updates on the Minimum Alternate
Tax (MAT) and special tax incentives for new manufacturing
units or startups. The stock market is highly sensitive to corporate tax
announcements, as they directly impact the Net Profit After Tax (PAT) of listed
companies.
6. Financial Sector Reforms
Key reforms
often include the privatization of public sector banks, capital infusion into
struggling banks (recapitalization), or the introduction of new financial
instruments like "Green Bonds." Recent budgets have also focused on
digital infrastructure, such as the Digital Rupee (CBDC) and the expansion of
the GIFT City. These reforms aim to make credit more accessible and affordable.
For finance students, these updates signal the direction of future jobs in
Fintech, Investment Banking, and Wealth Management.
7. Rupee Comes From and Rupee Goes
To
This
is a visual summary of the government's entire ledger. "Rupee Comes
From" shows the sources of revenue, where
"Borrowings and Other Liabilities" and "GST" are usually
the largest contributors. "Rupee Goes To" shows the
expenditure, where "Interest Payments" and "States' Share of
Taxes" typically take the biggest slices. Analyzing these charts helps
students understand national priorities. For example, if a larger portion of
the rupee is "going to" Capital Expenditure rather than Subsidies, it
indicates a focus on long-term infrastructure growth rather than short-term
consumption.
Conclusion:For a commerce student, the Union Budget is more than just a speech—it is the real textbook where we will be calculating tax based on thy numbers provided in the budget speech. By understanding its history, traditions, and key terms like fiscal deficit and tax reforms, you gain a clearer picture of India’s economic roadmap. Stay curious and watch the budget to see these concepts in action! The Department will have Presentation by students on Impact of Union Budget 2026 on Various Sectors of Indian Economy.
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