Union Budget 2026: Sitharaman’s Ninth Budget Amid Growth Slowdown, Inflation Fears and Kerala’s Demand for Fair Share

New Delhi: Union Finance Minister Nirmala Sitharaman will present the Union Budget tomorrow at 11 a.m. Expectations are high that the budget will include announcements taking into account the warnings raised in this year's Economic Survey, which has cautioned about a slowdown in growth and a rise in inflation in the coming financial year. There are also indications that the budget may include special announcements for states such as Kerala, Tamil Nadu, and West Bengal, where elections are due this year.

This year’s budget will be the ninth consecutive budget presented by Finance Minister Nirmala Sitharaman. With the Economic Survey predicting a decline in GDP growth, the budget should include measures to prevent such a situation and should reflect measures aligning with the assessment, says financial analysts. While economic growth for the current year is estimated at 7.4 per cent, the Economic Survey has projected growth of only 6.8 to 7.2 per cent in the next financial year.

The Survey has also warned of rising inflation in the coming year and projected the fiscal deficit at 4.4 per cent. In this context, some economic experts have pointed out that substantial relief for the middle class—already struggling with inflation and rising prices—may be unlikely.

As India’s Union Budget for 2026-27 nears announcement on February 1, Kerala is watching closely with expectations and concerns over what it might gain — and what it may miss — from the Centre’s fiscal blueprint. State leaders have been vocal in urging fair treatment, while analysts and opposition figures point to long-standing funding challenges.

Kerala Finance Minister K N Balagopal has publicly stated that the state is anticipating its “rightful share” of central allocations, a reference to past shortfalls under the outgoing Finance Commission formula that he says hurt Kerala’s fiscal capacity. The minister has urged the Centre to make amends for reductions the state experienced in previous budgets and ensure equitable distribution of key funds.

Meanwhile, the Jan Swasthya Abhiyan, a collective of public health activists, has strongly demanded that allocations for the health sector be doubled. There are also strong indications that the budget will include announcements aimed at poll-bound states such as Kerala, Tamil Nadu, West Bengal, Assam, and Puducherry. But the states are watching the budget carefully as states like Kerala has been continuously ignored by the BJP led central government, leading to financial crisis.