Mohammad Hanief
Union Budget 2026 assumes critical importance at a time when India stands at a delicate yet promising phase of its economic journey. Scheduled to be presented in Parliament on February 1, 2026, the Budget will be the country’s 88th since Independence and the second full-year fiscal blueprint of the Narendra Modi-led government in its third term. As Finance Minister Nirmala Sitharaman prepares to outline the government’s economic strategy, expectations are high that the Budget will reinforce India’s growth momentum while responding to region-specific development needs, particularly those of Jammu & Kashmir.
India approaches Budget 2026 with a relatively strong macroeconomic foundation despite persistent global uncertainties. While advanced economies continue to face subdued growth, geopolitical tensions and inflationary pressures, India remains among the fastest-growing major economies. Growth projections for the 2025-26 financial year largely place real GDP expansion in the range of 6.5 to 6.8 per cent, following an estimated growth of over 7 per cent in the preceding year. This moderation reflects a return to a more sustainable growth path rather than a slowdown, underpinned by strong domestic demand, public investment and structural reforms.
These growth dynamics form the broader backdrop against which Budget 2026 is being framed. A stable GDP trajectory enhances the government’s fiscal space, enabling sustained investment in infrastructure, social sectors and regional development while maintaining fiscal discipline. At the same time, the Budget is expected to address emerging challenges related to employment generation, regional disparities and climate resilience.
Public capital expenditure is likely to remain a central pillar of the Budget strategy. In recent years, infrastructure spending has emerged as a key driver of economic expansion, stimulating demand, generating employment and crowding in private investment. Continued emphasis on roads, railways, logistics, energy and digital connectivity is expected, with a focus on improving efficiency and last-mile access. For Jammu & Kashmir, infrastructure investment holds particular significance. The region’s mountainous terrain and historical connectivity constraints have long limited economic integration. Enhanced road networks, better rural connectivity and strengthened digital infrastructure can substantially reduce logistical barriers and unlock new economic opportunities.
Agriculture and allied sectors are expected to remain at the heart of the government’s development agenda. Despite rapid urbanisation, agriculture continues to support a significant share of India’s population and remains central to rural livelihoods. Budget 2026 is likely to reinforce efforts to improve farm incomes through expanded irrigation, better access to credit, climate-resilient practices and stronger value chains. These priorities resonate strongly in Jammu & Kashmir, where agriculture and horticulture form the backbone of the rural economy.
The region’s agro-climatic diversity supports high-value crops such as apples, walnuts, almonds and saffron, which contribute substantially to local incomes. However, challenges related to storage, processing, transportation and market access continue to constrain growth. Targeted budgetary support for cold storage facilities, modern mandis, agro-processing units and improved logistics can significantly enhance value realisation for farmers. Strengthening irrigation infrastructure and expanding risk-mitigation mechanisms would further support agricultural resilience in the face of climate variability.
Tourism remains another sector with transformative potential for Jammu & Kashmir. The region’s natural landscapes, cultural heritage and scope for adventure and eco-tourism position it as one of India’s most distinctive destinations. In recent years, improvements in connectivity and security have contributed to a revival in tourist inflows. Budget 2026 offers an opportunity to consolidate this trend through investments in tourism infrastructure, hospitality services and skill development. A focus on sustainable tourism models will be essential to balance economic growth with environmental preservation, particularly in ecologically sensitive areas.
Employment generation and youth empowerment are expected to be key national priorities reflected in the Budget. India’s demographic profile underscores the urgency of creating meaningful employment opportunities while equipping young people with relevant skills. Continued emphasis on skill development programmes, entrepreneurship support and strengthening micro, small and medium enterprises is anticipated. For Jammu & Kashmir, where unemployment among educated youth remains a pressing concern, targeted skilling initiatives and support for local enterprises can play a crucial role in harnessing human capital and fostering self-reliance.
Education and healthcare, as foundational pillars of long-term development, are also likely to receive sustained attention. Investments in educational infrastructure, digital learning platforms and healthcare delivery systems are essential for improving productivity and social outcomes. In Jammu & Kashmir, strengthening schools, higher education institutions and medical facilities-particularly in rural and remote areas-can significantly enhance quality of life and economic participation. Improved access to these services also contributes to social stability and regional equity.
Central assistance continues to play an important role in Jammu & Kashmir’s development framework. As a Union Territory with distinct administrative and fiscal needs, the region relies significantly on central support to bridge resource gaps and fund priority projects. Budget 2026 is expected to maintain this assistance, with an increasing emphasis on efficient utilisation and outcome-based implementation. Ensuring that allocations translate into visible improvements on the ground will be critical for sustaining public confidence and developmental momentum.
Balanced regional development within Jammu & Kashmir remains an important consideration. Addressing disparities between different areas of the Union Territory is essential for inclusive growth and social cohesion. Equitable distribution of infrastructure projects, educational institutions and healthcare facilities can help ensure that the benefits of economic growth are shared more evenly and contribute to long-term stability.
At the national level, tax policy reforms are also expected to feature in Budget 2026. Continued efforts to simplify the tax structure, rationalise rates and enhance compliance can strengthen consumption, improve ease of doing business and support private investment. A predictable and stable tax environment reinforces economic confidence, with positive spill-over effects across regions, including emerging economies like Jammu & Kashmir.
Sustainability and green growth are increasingly integral to India’s development strategy and are likely to influence budgetary priorities. Investments in renewable energy, water conservation, climate adaptation and environmental management are essential for long-term resilience. For Jammu & Kashmir, where livelihoods are closely linked to natural resources and ecological balance, environmentally responsible development is particularly important. Budgetary support for green infrastructure and climate-resilient initiatives can help protect ecosystems while supporting economic growth.
As the presentation of Union Budget 2026 draws closer, the expectations from policymakers are clear. The Budget must consolidate India’s growth momentum, address structural challenges and ensure that development is both inclusive and regionally balanced. For Jammu & Kashmir, it represents an opportunity to accelerate economic integration, strengthen key sectors and improve living standards.
Ultimately, the success of Budget 2026 will be judged not merely by GDP projections or fiscal numbers, but by its ability to convert growth potential into tangible outcomes. A thoughtful and forward-looking fiscal roadmap can play a decisive role in shaping a future where national growth and regional development move forward together, placing Jammu & Kashmir firmly within India’s broader journey toward sustainable and inclusive prosperity.
(The author is a senior analyst)