Finance Minister Nirmala Sitharaman presented India’s Union Budget 2026-27 in Parliament on February 1, outlining a massive Rs 53.47 lakh crore ($583.49 billion) spending plan that prioritises infrastructure and defence while drawing sharp criticism for inadequate allocations to religious minorities and marginalised communities.
The budget proposes a record Rs 12.21 lakh crore for capital expenditure. Defence spending will rise by approximately 15 percent to $85 billion, constituting 11 percent of total expenditure, following a four-day conflict with Pakistan in May 2025. The infrastructure push includes plans for seven high-speed rail corridors connecting major economic hubs.
The government proposed a tax holiday until 2047 for foreign companies providing cloud services globally through Indian data centres, a 21-year concession extending to India’s independence centenary.
However, the budget has triggered sharp controversy over allocations for minority welfare. The Ministry of Minority Affairs received Rs 3,400 crore, representing a marginal increase of Rs 50 crore from the previous year. This amounts to less than 0.01 percent of GDP for communities comprising nearly one-fifth of India’s population.
Critics point out that the allocation translates to approximately Rs 145 per capita annually for minorities. According to official data, Muslims lag behind the national literacy average by 14 percentage points, yet scholarship funds remain inadequate. The contrast is stark: while multinationals receive tax concessions until 2047, minority communities receive what observers describe as a pittance.
Within the ministry’s allocation, Rs 831.70 crore has been earmarked for educational empowerment of minority students. The Quami Waqf Board’s schemes witnessed a 2.5-fold increase to Rs 32 crore, aimed at computerising waqf records and developing vacant urban waqf land.
Pre-matric scholarships for minorities were allocated Rs 198 crore, while post-matric scholarships received Rs 581 crore, representing modest increases from the previous year. However, past patterns raise questions about actual implementation.
Several schemes targeting minority education have faced drastic reductions or been discontinued entirely. The merit-cum-means scholarship for undergraduate and postgraduate students in technical and professional courses received just Rs 0.06 crore this year, down from Rs 7.34 crore in 2025-26. In 2014-15, the same scheme had an allocation of Rs 302 crore with actual expenditure of Rs 381.38 crore.
The Maulana Azad National Fellowship received Rs 36.14 crore, reduced from Rs 42.84 crore the previous year. The fellowship was officially discontinued from the 2022-23 academic year, though assurances were given that existing beneficiaries would continue receiving support. However, reports indicate that payments have either stopped or face prolonged delays.
Multiple programmes have been discontinued in recent years, including the Maulana Azad Medical Aid Scheme, the Maulana Azad Education Foundation (closed in 2024), and the Hamari Dharohar scheme for protection of minority culture and heritage. The National Minorities Development and Finance Corporation received a token allocation of Rs 5 crore, leading observers to believe it is on the verge of closure.
Analysts note a troubling pattern where announced allocations are subsequently revised downward, with large portions remaining unspent. In 2025-26, the ministry’s allocation of Rs 678.03 crore across six education schemes saw only Rs 55.03 crore actually released. In 2024-25, the initial allocation of Rs 3,183 crore was reduced to Rs 1,868 crore, with actual expenditure standing at just Rs 714.98 crore.
Before the budget presentation, Bishop Raimson Victor of the Diocese of Rajasthan, Church of North India, expressed hope that minority concerns would be addressed. He appreciated past initiatives like the Hamari Dharohar Yojana and Pradhan Mantri Jan Vikas Karyakram, though the latter faced reductions in the current budget. “All communities have expectations from the Union Budget, and minorities, too, are hopeful that their concerns and aspirations will be addressed,” he said.
Five major states with sizeable Muslim and Christian populations are expected to hold legislative elections possibly by summer’s end. These include Assam, West Bengal, Tamil Nadu, Kerala, and the union territory of Pondicherry. Of these, only Assam is currently governed by Modi’s Bharatiya Janata Party.
Education spending rose modestly to 2.6 percent of the budget, still below the National Education Policy 2020 target of 6 percent of GDP. Many schools lack basic infrastructure including blackboards and toilets for girls. Healthcare spending remained at 1.99 percent of the budget, falling short of the 2.5 percent GDP target, with individuals bearing 60 percent of medical expenses.
The budget projects GDP growth between 6.8 and 7.2 percent for the new financial year beginning April 1. Modi stated after the budget presentation that “India is not content with simply being the fastest-growing economy. India wants to become the world’s third-largest economy.”
The budget was presented amid trade tensions with the United States. A day later, President Donald Trump and Prime Minister Modi reached an agreement reducing US tariffs on Indian goods from 50 percent to 18 percent, with India committing to stop buying Russian oil.
