Budget 2026 Brings Relief for Middle Class, Says Finance Minister
Finance Bill passed in Lok Sabha highlights tax ease, MSME support and fiscal consolidation roadmap
NEW DELHI, Mar 26: Finance Minister Nirmala Sitharaman on Wednesday asserted that the Union Budget 2026-27 prioritises relief for the middle class while advancing structural reforms aimed at strengthening the economy.
Replying to the debate on the Finance Bill in the Lok Sabha, the minister said the government is pursuing reforms with “clarity and conviction,” focusing on improving ease of living and supporting key sectors such as MSMEs, farmers and cooperatives.
She highlighted that the fiscal deficit is projected to decline to 4.3 per cent of GDP by FY27, a significant improvement from 9.3 per cent in FY21, while the debt-to-GDP ratio is also on a downward trajectory compared to major global economies.
The Lok Sabha approved the Finance Bill 2026 through a voice vote, incorporating multiple amendments proposed by the government. The legislation is anchored on five core principles, including trust-based tax administration, simplified compliance, and strengthening India’s position as a global business destination.
Addressing concerns over middle-class benefits, Sitharaman pointed to reductions in Tax Collected at Source (TCS) on foreign remittances for education and medical needs, along with a steep cut in TCS on overseas tour packages. Measures such as customs duty exemptions on essential medicines and simplified rules for goods carried by passengers were also introduced to ease financial and procedural burdens.
For taxpayers, the government has expanded the scope for filing updated income tax returns even during reassessment proceedings, alongside introducing a disclosure mechanism for small foreign assets. These steps aim to reduce compliance challenges and encourage voluntary transparency.
On MSMEs, the minister said the government is shifting its approach towards a more supportive framework by prioritising facilitation over punitive measures. Initiatives under the Bill are designed to enhance liquidity, reduce regulatory burden and enable greater participation in economic growth.
Sitharaman also underscored improvements in GST collections and automobile sales as indicators of rising demand following recent rate rationalisation. She maintained that reforms in customs and trade policies are intended to streamline processes and boost overall economic activity.
Defending the Centre’s use of cess and surcharge, the minister said that funds collected are being fully utilised for developmental schemes, with allocations to states often exceeding collections over recent years.
