Budgets are often judged by what they announce. I prefer to judge them by what they quietly enable.
India today stands at a rare inflection point—where institutional maturity, digital infrastructure, citizen
compliance, and economic aspiration are converging into something far more powerful than fiscal arithmetic. We are designing, almost unconsciously, the operating system of a confident nation.
The Union Budget 2026–27, therefore, should not chase novelty. It should consolidate trust, deepen automation, and strengthen the nation’s balance sheet—both economic and moral.
From tax law to tax trust
The Goods and Services Tax law has now been comprehensively revised. Conceptually, structurally, and administratively, the GST has reached maturity. What remains is not legislation but execution.
The next frontier must be faceless assessment, seamless grievance redressal, and a systemic shift towards taxpayer trust and compliance orientation. Litigation should gradually become an exception rather than the default pathway. When the tax administration becomes invisible, predictable, and digitally accountable, compliance naturally rises—not through fear, but through confidence.
India has already demonstrated this in income tax processing, refunds, and data reconciliation. The GST must now experience the same cultural evolution—from enforcement to partnership.
The radical power of stability in the new income tax regime
The new Income Tax Act comes into force from April 1, 2026. There is a temptation, almost an instinct, to immediately tweak, refine, and improve.
My view is contrarian: perhaps the most radical reform now is to change nothing for five years.
Policy stability is an underrated economic accelerant. When citizens and enterprises can plan with certainty—without anxiety of shifting rules—capital formation deepens, long-term savings increase, and compliance becomes habitual rather than tactical.
A stable tax regime will allow digital systems, automation engines, AI-based assessments, and voluntary disclosure ecosystems to fully mature. Reform now should be behavioural, not legislative.
A new compact between taxpayer and tax gatherer
Something profound is happening beneath the surface of our economy: a growing mutual respect between the taxpayer and the tax gatherer.
India is entering an era of massive financialisation—digital payments, formal employment, asset digitisation, embedded compliance, and real-time reporting. Naturally, tax collections are growing faster than the GDP. This divergence will eventually stabilise as automation, self-compliance, and data integrity converge.
The goal should not be maximising tax extraction but achieving predictable, frictionless, voluntary compliance at scale. When trust compounds, enforcement costs fall. When systems learn continuously, leakages disappear silently.
This is governance maturity, not headline reform.
Defence, infrastructure and the discipline of capital allocation
India’s geopolitical posture, urbanisation trajectory, climate resilience requirements, and manufacturing ambition all point to one unavoidable truth: allocations to defence and infrastructure, both hard and soft, must rise materially.
At the same time, wasteful subsidies must be steadily rationalised. Subsidies distort capital allocation, suppress productivity signals, and lock fiscal capacity into political inertia. Compassion must evolve into capability building.
The fiscal equation cannot be balanced by taxation alone. It must be balanced by an intelligent asset strategy.
Monetising the national balance sheet — the missing reform
The climate is ripe for a bold, long-overdue shift: systematic monetisation of public assets. Conversion of selected public debt into long-term equity instruments at both central and state levels.
India holds vast underutilised land banks, infrastructure assets, mineral rights, transport corridors, digital platforms, and enterprise equity. Proper valuation, professional monetisation frameworks, and transparent governance can unlock massive capital without increasing fiscal stress.
Debt-to-equity conversion mechanisms can create fiscal breathing room, improve balance sheet resilience, and fund growth without inflationary borrowing.
These two levers—asset monetisation and debt restructuring—are the only sustainable pathways to keep fiscal deficits under control while funding national ambition. Done well, they will allow India to meet, and exceed, its long-term fiscal policy targets without sacrificing growth or stability.
The deeper story — India as a high-trust economic system
What excites me most is not any single line item in the budget. It is the quiet emergence of India as a high-trust, high-automation, and high-compliance economy, where governance becomes invisible, friction disappears, and institutions scale effortlessly through technology.
When tax systems become invisible, capital flows freely. When compliance becomes embedded, productivity accelerates. When balance sheets are actively managed, fiscal sovereignty strengthens. This is not merely economic reform; it is civilisational operating system renewal.
The Budget of 2026–27 should, therefore, be judged not by applause in Parliament, but by how confidently India walks into the next decade with trust, discipline, and balance sheet strength.
And in that quiet architecture of reform lies the true promise of a Viksit Bharat.
Shailesh Haribhakti is a Chartered Accountant, Independent Director, and author of Sustainable Abundance and History of the Future.
