• Nine practical ideas for 2026 Budget. Some of these can be implemented in 2025. They cover a wide range of topics & take us closer to Viksit Bharat 2047.

The 2025 India Budget has one big change i.e. increase of income-tax exemption limit under the new tax regime to Rs 12 lakhs. The extent of increase was unexpected and caught media imagination. Otherwise, it is more of tinkering as the Finance Minister (FM) effecting changes based on feedback.

Come budget time and industry/experts are skilled at asking for more expenditure but few give ideas to increase government revenue.

Notwithstanding some good initiatives like increasing number of medical seats by 10,000 here are some simple ideas for Budget 2026.

1. People of India must know which government, Centre or State, is responsible for what for e.g. Agriculture is a state subject.

Every year, experts publish their ideas on what the Central Budget must do for farmers. But, did you know that under the Indian Constitution agriculture is a state subject.

Under the 7th Schedule of the Constitution, agriculture, health and water (includes irrigation and canals) come under the State List, whilst employment, education, land, labour, industry and power come under the Concurrent List. So also “‘land’ falls under the State List, while ‘acquisition and requisitioning of property’ comes under the Concurrent List, empowering the Centre as well as states to legislate on the matter.” Source Purchase of paddy and wheat at MSP, declaration of MSP for others, funding fertilizer subsidy-irrigation-agricultural research-building of dams-maintenance of buffer stocks, agricultural lending and deciding on import/export policy is what the Central government does.

Why is agriculture a state subject?

The separation was first made by the Government of India Act 1935 (passed by British Parliament). It was assumed by the Constitution makers that agriculture was the responsibility of the states hence they were given the right to tax agricultural income.

In 1950s, there was no fertilizer subsidy/Kisan Credit Cards etc. Declaration of minimum support price (MSP) was introduced in the 1960s during the Green Revolution. Today the Central government has a MSP program for wheat and rice, i.e. “heavily concentrated in Punjab and Haryana; and South eastern Andhra Pradesh”, decides import-export policy for agriculture products and provides financial support e.g. interest subvention on farmer loans and PM Kisan. Read  Solution to Farm Distress lies with State Governments

State level politicians accept Central initiatives on agriculture but say it is a State Subject when the status-quo is proposed to be disturbed.

How can Central government be responsible for something it does not have the corresponding authority?

It is time States agree moving agriculture to the Concurrent List. But then the colonial Constitution would be in danger!

We are in stuck in 1935. We accept Change only during a crisis like 1991   and forget the only thing constant in life is change. 

The Budget could have outlined a framework for the setting up of, on the pattern GST Council, a Centre-States Council for Agriculture that would look at all issues concerning agriculture in an integrated manner and prepare action plan/budgets.

Supreme Court Judges need to be educated too since any change in the 1950 Constitution invariably lands up in SC.

Go to end of article for Table that gives Summary of which government decides the farmer’s future.

India is run by the States. So we must focus on Budget Outcomes and Reforms by atleast the larger states

2. Promote Drip-Irrigation Nationwide.

Drip irrigation in a farm near Bhuj in Kutch, Gujarat. 2018.

One of the serious problems is falling ground water levels. This Indian Express report states, “While Punjab topped in groundwater depletion, Bihar was at number two with 188 (57.8 %) of its 325 wells recording a fall of varying degrees in water levels, followed by Uttar Pradesh (53.3 %), and Haryana (52.3 %).”

The Budget could have a Scheme to promote drip-irrigation nationwide. It could make expense by India Inc on capital expenditure permissible expenses under CSR.

In Kutch, Gujarat and water-starved Yuba City (USA) I have seen the benefits of drip-irrigation.

Consumers can help by changing food habits for e.g. shifting to millets and traditional rice instead of basmati.

Devi Lakshmikutty of ‘Save the Rice Campaign’ wrote, “Paddy rice is not the culprit, we are the culprits, we polish the rice beyond recognition, we do not try out the range of traditional rice varieties with diverse nutritive profiles.” Source Traditional rice varieties of India

3. GOI must create a Public Trust that allows Indians/India Inc to contribute to nation building for e.g. weapons and ISRO. 

Set up Bharat Suraksha Trust (BST) and Bharat Pragati Trust (BPT).

BST contributions could be used for the Border Villages Program and Purchase of Weapons like S-400 and Rafale Jets.

Excellent school run by Indian Army near Kargil. 2016. 

The village program could involve schools, health, vocational training centres and tourism along border with Chinese-occupied Tibet and Pakistan. The trust could also employ residents of border villages for say planting trees. This will reduce migration because border residents are India’s first line of defence. Album   Army Goodwill School, Kargil and VCT Drass, Ladakh  

BPT contributions to be used for strategic technology missions that, if successful, make Indians proud for e.g. the Chandrayaan-2 mission.

How will the above work?

Create a separate website for projects where public contributions are sought.

India Inc, resident Indians, Persons of Indian origin can contribute in rupees to individual objectives only from a bank account held in India. It is love for country and not tax breaks that must stimulate contribution.

The technology backbone of website, its running and citizen interface should be outsourced, a bit like how the passport office is managed. Each project would have brief project details and a framework for association.

Funds collected by both the trusts should be used only for the purposes for which the money was raised. If people see results, success or failure, money shall pour in. Conversely, if the government used these funds elsewhere, the idea will become a non-performing asset.

India Inc must realise that its prosperity is intertwined with the progress made by India and Bharat.   Read   How to get Innovative with CSR 

4. Reduce Number of Beneficiaries getting Free Food under National Food Security Act (NFSA)

The 2013 NFSA de-linked coverage under Targeted Public Distribution System from erstwhile Poverty estimates to Population estimates to cover 67% of population. Current cost app 2 lakh crs.

Poverty is falling but coverage same. In 2015, the Shanta Kumar Committee recommended bringing down the population coverage from 60% to 40% to “comfortably cover BPL families and some even above that.” 

Support only those who are at the bottom of the pyramid. Courts should not intervene since this is not a matter of law. The number of beneficiaries and cost can be reduced in 3 ways.

1. Modi 1 had run a very good campaign urging people to give up subsidized LPG cylinders. Run a similar campaign on free food grains.

2. Review/update basis of inclusion and exclusion parameters that were decided when the NFSA was passed in 2013. Use Technology to integrate databases. Follow parameters to remove bogus claimants

Exclude government employees even if SC/ST. Evaluate if those who have benefitted from subsequent government schemes like PM Kisan (cost Rs 66 lakh cr), transfer schemes to women (cost atleast Rs 2 lakh cr) are still eligible.

Opposition will shed tear and States shall resist! Mr Modi can use technology, facts and his famed oratory skills to respond.

When we have the One Nation One Ration Card scheme, can India not have an all India criteria in consultation with states?

3. Some states also give free food grains above the Centre’s allocation. A comparison of list of beneficiaries of Centre/ states might throw up anomalies. Read   Centre must review NFSA beneficiaries for Budget. Use Aadhar database, not 2011 Census

5. Sell Stake in Listed PSUs to reduce fiscal deficit

Borrowings of Centre/States still higher than pre-pandemic levels. Courtesy HT Media Ltd.

Chief Economist Axis Bank N Mishra wrote in The Times of India, “Prudent use of the more than Rs 40L cr valuation of government holdings in listed public-sector undertakings, can help GOI to achieve faster fiscal consolidation, reduce debt to GDP to much lower levels and provide a fiscal boost to growth, if necessary.”

More paper will increase depth of the Indian stock markets and channelize savings too.

6. List State level PSUs that must be sold or listed

The RBI report on state finances stated said Punjab, Bihar, Kerala and West Bengal have high levels of debt and need debt consolidation. Start by focusing on these states. So while -

The decision to disinvest or list on the stock exchanges is that of the State governments the Budget could have set the ball rolling by tabling Niti Aayog Reports in Parliament which named state level PSU’s to be disinvested. This could also become a parameter for the 16^th Finance Commission whilst determining grants to states.  

7. Over-emphasis on GST Collection not Ease of Doing Business

Inter-state GST Council Meetings focus on the total GST collected rather than a complimentary objective of making GST classifications simple for e.g. popcorn. Complications consume management time and reduce ease of doing business.

With ever increasing state-level freebies, cutting across party lines, I understand states desire to maximise revenue. Strike a balance between both is suggested.

8. State level Freebies-Women Allowance, Power Subsidy, Free bus women, Old Pension scheme shall strain state finances.

Analysts are happy to note that Budget refers to a reduction in Centre’s debt to GDP ratio to 51% by around 2030. However, as per above table the consolidated debt for Centre and States is 87.5% for 2024-25 BE. 

One, we must focus on consolidated debt and not Centre debt alone. If this were to fall to 70-75% of GDP, it would still be on the higher side and remain a source of vulnerability in the given uncertain environment says the Business Standard editorial of 5/2/25. If states borrow excessively to fund freebies, it shall increase inflation. Read   Why State Govt borrowing must be in limits

We must remember these words of I.G. Patel, RBI governor from 1977 to 1982, “It was already clear by 1986 that we were in an internal debt trap which would soon engulf us in an external debt trap. Rather than take any remedial action, we went merrily along, borrowing more and more at home and on shorter and shorter terms abroad.”

While Modi Sarkar has restored macro-economic stability, the geopolitical environment is unstable. Excerpts from late Dr MM Singh budget speech of 1991, “The origins of the problem are directly traceable to large and persistent macro-economic imbalances and the low productivity of investment, in particular the poor rates of return on past investments. There has been an unsustainable increase in Government expenditure.” Read   FREEBIES are paid for by the common man-could lead to a 1991 type crisis for India

9. Promoting Tourism to Southeast Asia as an Instrument of India’s Foreign Policy

The Government of India and tourism board of host country could run a joint advertising campaign in India to inform Indians about places to visit in each country.

The campaign could promote countries like Cambodia, Vietnam, Indonesia, Thailand and/or specific destinations for e.g. Grand Palace Complex in Bangkok, Mother temple Bali, 326 foot Shwedagon Pakoda in Myanmar, Wats of Bangkok, Hindu Temples in Bangkok, Prambanan Temple in Java, Jakarta’s National Museum is chock-full of Hindu artefacts, Todaji Monastery in Nara, Japan has a bronze statue of Vairochana Buddha and 26 feet statues of Lord Vishnu and Shiva in Japanese rendition., Yatra to Mount Bromo and Indic Heritage in Cambodia

Back home Bodh Gaya needs infrastructure change like Ayodhya. Nitish Kumar!

Indians voted for CHANGE hence Modi. While good work has been done Yeah Dil Mange More

Also read

1. IDEAS How India can Realize POTENTIAL

2. How to get Innovative with CSR

3. Solution to Farm Distress lies with State Governments

4. Centre must review NFSA beneficiaries for Budget. Use Aadhar database, not 2011 Census

5. FREEBIES are paid for by the common man-could lead to a 1991 type crisis for India

6. What are the Central and State governments responsible for in India

7. Why India needs a Masterclass in responsibility & accountability of each arm of the Government

8. Promoting Tourism to Southeast Asia as an Instrument of India’s Foreign Policy

9. The Long Road to the 1991 crisis

Summary of how & which government decides the farmer’s future 

                                                                         Responsibility Govt

*Food Corporation of India who work with Centre and State agencies.

@ Note some States announce Bonus over and above the MSP.

$ One exception is cotton in Maharashtra where price is state govt determined.