The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, sets total expenditure at ₹50,65,345 crore and total receipts (excluding borrowings) at ₹34,96,409 crore. The fiscal deficit target is 4.4% of GDP. A landmark personal income tax change exempts income up to ₹12 lakh from tax. Capital expenditure is pegged at ₹11,21,471 crore. The budget's four engines of growth are agriculture, MSMEs, investment, and exports, framed under the theme 'Sabka Vikas'.

The Union Budget is the government's annual financial statement under Article 112 of the Constitution, presenting estimated receipts and expenditure for the financial year. For 2026-27, the budget operationalises several macro-fiscal concepts aspirants must understand.

**Fiscal Deficit** is the gap between total government expenditure and total receipts excluding borrowings. At 4.4% of GDP, this is part of India's medium-term fiscal consolidation path under the FRBM Act, which targets bringing the deficit toward 4.5% in 2025-26 and further in subsequent years.

**Capital Expenditure (Capex)** at ₹11,21,471 crore represents spending that creates long-term productive assets (roads, railways, ports). High capex has a multiplier effect on GDP and crowds-in private investment — a key mechanism the RBI Grade B examiner tests.

**Revenue Deficit** is the excess of revenue expenditure over revenue receipts, showing how much of borrowings fund current consumption rather than assets.

**Tax-to-GDP ratio** and direct vs. indirect tax composition are recurring analytical angles. The zero-tax threshold raised to ₹12 lakh under the new regime reduces revenue from personal income tax but aims to boost consumption demand — a fiscal-monetary policy coordination angle.

**Four engines of growth** (agriculture, MSMEs, investment, exports) reflect the government's structural priorities — each linked to specific scheme allocations that NABARD and RBI examiners test through 'withheld datum' questions on allocation amounts.