Opinion | Union Budget 2026: Reading India’s Fiscal Choices Through The Lens of Responsibility

Union Budget 2026 is more than an exercise in accounting. It is a statement of intent—political, ethical, and social—about what the nation chooses to prioritise at this moment in its journey. Budgets are often read for their numbers, but they deserve to be read for their values. They reveal how a state understands its responsibilities: to its citizens, to the environment that sustains its economy, and to the wider world it is embedded in. In an era where nations are increasingly assessed not only by economic size or strategic power but by the credibility of their commitment to welfare, sustainability, and global stability, fiscal choices become moral choices. They indicate whose lives are being improved, which futures are being prepared for,

and how responsibly national power is being exercised.

It is in this normative context that the recently launched Responsible Nations Index (RNI) offers a useful lens. By evaluating countries across internal, environmental, and external responsibility, the RNI shifts attention away from growth alone and towards ethical stewardship. Viewed through this framework, Union Budget 2026 invites examination not merely for what it funds, but for the kind of nation it seeks to shape.

On internal responsibility—the first and strongest pillar of RNI—the budget sends a clear and confident signal. Its emphasis on citizens’ well-being, equity, and empowerment is reflected in sustained public investment aimed at long-term growth and employment creation. The proposed capital expenditure of Rs 12.2 lakh crore reinforces a multi-year strategy that treats public spending as a catalyst for economic momentum, private investment, and job creation, elements that align closely with RNI’s economic performance indicators.

A particularly notable feature is the renewed focus on micro, small, and medium enterprises. The proposed Rs 10,000 crore SME Growth Fund, aimed at nurturing “future champions,” recognises MSMEs not merely as economic units but as social anchors that generate livelihoods and distribute growth more equitably. This emphasis resonates strongly with the RNI’s understanding that responsible development is measured by how effectively growth reaches vulnerable and marginalised sections of society. Complementing this are targeted interventions for handloom, handicrafts, textiles, artisan livelihoods, and skill modernisation, signals of a developmental approach that looks beyond headline GDP numbers.

The budget’s commitment to basic amenities, another core component of RNI’s internal responsibility framework, is visible in increased allocations for education, health, water, and sanitation. Education spending has risen by over 8 per cent compared to the previous year, with Rs 1.39 lakh crore earmarked for the sector. School education continues to receive the largest share, followed by higher education, while parallel investments in vocational training and digital learning infrastructure aim to address persistent skill gaps and improve employability. These measures, though indirect, contribute meaningfully to the employment and human capital indicators within RNI.

Inclusivity also finds concrete expression. The announcement to establish at least one girls’ hostel in every district is a significant step towards improving access and retention in education for young women. Over time, such measures are likely to reflect positively in indicators like gross enrolment ratios, which RNI tracks as part of women’s empowerment. Similarly, increased allocations for health, drinking water, and sanitation, most notably a nearly threefold increase for the Jal Jeevan Mission, underscore a long-term commitment to improving quality of life. Together, these investments suggest an approach to internal responsibility that links economic growth with opportunity creation, social inclusion, and productive capacity.

The picture is more mixed when viewed through the lens of environmental responsibility, the second pillar of RNI. Budget 2026 does contain elements that signal intent towards sustainability, particularly through infrastructure-led efficiency. Proposals to expand freight corridors, operationalise National Waterways, and develop seven high-speed rail corridors point towards a shift in the movement of goods and people that could reduce environmental stress over time. There is also emphasis on long-term energy security, technological innovation related to climate challenges, and building resource resilience.
However, these measures largely remain preparatory. While they may create conditions for future improvements, they are not yet clearly tied to measurable outcomes such as emissions reduction, biodiversity protection, or conservation of natural capital, the indicators that form the core of RNI’s environmental responsibility framework. As a result, the environmental alignment of Budget 2026 can best be described as moderate: intent is visible, but the responsibility narrative is not yet fully articulated or embedded in fiscal design.

Finally, although a budget is primarily an internal policy instrument, its choices also have implications for a country’s external responsibility. In this respect, Budget 2026 reflects an indirect but meaningful alignment with RNI’s third pillar. Investments in infrastructure that support exports, efforts to simplify tax structures for globally competitive MSMEs, the introduction of trust-based compliance, and continued emphasis on macroeconomic stability all contribute to predictability and confidence in the global economic system. The budget’s focus on facilitating higher foreign direct investment and portfolio flows further signals India’s intent to remain integrated with global markets in a stable and responsible manner.

Taken as a whole, Union Budget 2026 emerges as a responsibility-forward fiscal blueprint. Its strongest alignment lies with internal responsibility, reinforcing the RNI’s central argument that a nation’s first duty is the responsible exercise of power in service of its people. The absence of a clearly articulated environmental responsibility framework, however, remains a notable gap, one that future budgets will need to address by linking expenditure more explicitly to ecological outcomes. Even so, by prioritising internal development and economic stability, Budget 2026 lays a foundation upon which stronger and more measurable environmental accountability can be built, potentially placing India on a higher pedestal of responsible nationhood.

Hemangi Sinha is Project Head, Responsible Nations Index, World Intellectual Foundation, while Poonam Singh is Associate Professor, IIM Mumbai. Views expressed in the above piece are personal and solely those of the writer. They do not necessarily reflect News18’s views.