As Union Budget 2026 is approaching, it is becoming clear that the New Tax Regime has now become the government’s favourite. Big reliefs like higher basic exemption, ₹75,000 standard deduction and nil-tax threshold of ₹12 lakh in Budget 2025 gave direct benefit to the middle class. Today salaried taxpayers are paying practically zero tax up to ₹12.75 lakh. ITR data also shows the same – about 72% taxpayers have chosen the new regime. Simple slabs, low deductions and predictable savings make it more practical. The savings gap has become quite wide for those with income between ₹7.5 lakh to ₹25 lakh, while high-income earners are getting limited benefits. In Budget 2026, it is expected that the new tax regime will be pushed more aggressively, perhaps even as a default option. For the middle class, this is no longer just a choice but is becoming a smart decision.

India’s Fiscal Deficit: The fiscal deficit of the central government has increased to Rs 9.76 lakh crore by the end of November, which is 62.3 percent of the annual budget target set for the financial year 2025-26, whereas this figure was 52.5 percent in the same period last year. The government has estimated the fiscal deficit for the current financial year to be 4.4 percent of the Gross Domestic Product (GDP) i.e. Rs 15.69 lakh crore.

increase in fiscal deficit

According to the data of the Comptroller and Auditor General (CAG), the total income of the central government till November 2025 was Rs 19.49 lakh crore, which is 55.7 percent of the total budget estimate. Of this, Rs 13.94 lakh crore was received from tax revenue, Rs 5.16 lakh crore was received from non-tax revenue and Rs 38,927 crore was received as non-debt capital receipts. During the same period, the central government transferred Rs 9.36 lakh crore as share in taxes to the states, which is Rs 1.24 lakh crore more than last year.

The total expenditure of the central government till November stood at Rs 29.26 lakh crore, which is 57.8 percent of the annual budget estimate, which includes Rs 22.67 lakh crore revenue expenditure and Rs 6.58 lakh crore capital expenditure. The largest share in revenue expenditure was on interest payments, on which Rs 7.45 lakh crore was spent, while Rs 2.88 lakh crore was spent on subsidies.

What do experts say

Responding to these figures, ICRA Chief Economist Aditi Nair said that in the current financial year, the gross tax revenue of the central government is likely to be short by about Rs 1.5 lakh crore as compared to the budget estimate, but this shortfall can be compensated by better performance of non-tax revenue and savings in revenue expenditure, due to which the risk of exceeding the fiscal deficit target seems to be limited at present.

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This is a big and relieving news for lakhs of daughters of the country. Now no girl’s education will stop just because her college is far from home or there is no safe living arrangement. The central government is working on a scheme under which girls hostels will be built in every district of the country. Its direct benefit will be given to girl students from rural, remote and backward areas, who till now were deprived of higher education due to lack of accommodation.

The government believes that if daughters get safe and accessible accommodation for studies, they will be able to easily access colleges and universities. This scheme is considered very important to increase the participation of girls especially in subjects like Science, Technology, Engineering and Maths (STEM).

Big step of Education Ministry

The Union Education Ministry has prepared the proposal for this scheme and is preparing to send it to the Finance Ministry. It is believed that this scheme can be officially announced in the general budget of the year 2026. If this is approved, new girls hostels will be built in about 700 to 800 districts of the country. These hostels will be kept separate from normal women’s hostels, so that better facilities can be provided especially keeping in mind the needs of college going students.

There will be an important meeting with the states

An important meeting of Chief Secretaries of all the states is going to be held in Delhi between 26th and 28th December to discuss this scheme. Many important issues related to higher education will be considered in this meeting. In particular, there will be discussion on how to increase the Gross Enrollment Ratio (GER) in higher education to 50 percent and reduce the number of girl students dropping out.

States have also been asked to present plans to promote higher education at their respective levels. This will include suggestions like running classes in colleges in two shifts, opening new colleges and promoting online education.

Girls’ participation will increase in STEM education

The Education Ministry believes that many promising girl students living in rural areas are not able to choose courses like science and engineering simply because of lack of accommodation. By building a girls hostel, this problem will be solved to a great extent. When girl students get safe accommodation near the college, they will be able to study difficult but career-making subjects like STEM without fear and worry. Along with this, the government is also working on increasing the number of STEM courses and encouraging girl students for these subjects.

Emphasis on preventing dropout

The meeting will also discuss how to prevent dropouts due to economic, social and infrastructure problems. Providing hostel facility will especially benefit those girl students whose families are hesitant in sending them away. Under the New Education Policy 2020, the government aims to increase the enrollment of girl students in higher education to 50 percent by the year 2035. At present this figure is around 29 percent. To reduce this gap, the role of girls hostel is considered very important.

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Budget 2026: After the change in GST rates, the government has now started preparing for the country’s budget. The Finance Ministry has issued a circular regarding the preparations for the budget. It says that the ministry and its associated departments will start preparing for the budget of October 2026.

The special thing is that it is coming after 50 percent tariffs on the import of Indian goods of US President Donald Trump. Experts say that there is no scope for any reconciliation between the two countries before the upcoming budget in February next year, so the budget will be specially focused on the sectors who have suffered more than the tariff of Trump. Let us give you some more information about the preparations for the upcoming budget through this news.

When will the preparation of budget 2026 start?

The Finance Ministry will start preparing for the budget of 2026-27 from 9 October. Budget preparations are going to start amidst US India and global uncertainties arising from it.

In the next year’s budget, more attention will be paid to more and more employment opportunities along with increasing the demand. Along with this, focus will also be done on transporting the economy of the country at more than eight percent sustainable growth rate. The government estimates that during the current financial year, the country’s economic growth rate will be between 6.3 to 6.8 percent.

Some special things of circular

According to the budget circular (2026-27) of the Department of Economic Affairs, the Budget-East meetings chaired by the Secretary (Expenditure) will start from October 9, 2025. The circular states that financial advisors should ensure that the required details in VII from Appendix I are properly recorded by or before October 3, 2025.

The hard copy of the data in the specified format should be deposited for verification. The budget estimates for the financial year 2026-27 will be finalized after the completion of the budget-pre-meetings and the revised estimate (RE) meetings will continue till mid-November 2025.

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