The Union Budget 2026-27 has detailed the composition of government receipts and expenditure, detailing how resources are mobilised and allocated across transfers, liabilities and programme spending.
Where the rupee comes from
Borrowings and liabilities form the largest component of government receipts at 24 per cent. Income tax contributes 21 per cent, followed by corporation tax at 18 per cent.
GST and other taxes account for 15 per cent, while non-tax revenues make up 10 per cent. Union excise duties represent 6 per cent, customs duties 4 per cent, and non-debt capital receipts account for 2 per cent of total resources.
For FY27, revenue receipts are estimated at ₹35.3 lakh crore, while capital receipts are pegged at ₹18.1 lakh crore.
Where the rupee goes
States’ share of taxes constitutes 22 per cent of expenditure – the largest transfer – while interest payments account for 20 per cent, representing the government’s biggest committed liability.
Central sector schemes receive 17 per cent of the outlay, while defence accounts for 11 per cent of total expenditure. Centrally sponsored schemes make up 8 per cent.
Finance commission and other transfers represent 7 per cent, with another 7 per cent classified as other expenditures. Major subsidies account for 6 per cent, and civil pensions constitute 2 per cent of spending.
Overall expenditure
Effective capital expenditure is estimated at ₹17.1 lakh crore, while revenue expenditure is pegged at ₹41.3 lakh crore for FY27.
Public capital expenditure has increased from ₹2 lakh crore in FY15 to ₹12.2 lakh crore in FY27, according to the budget document.
Major spending heads
Among key sectors, transport is allocated ₹5,98,520 crore, followed closely by defence at ₹5,94,585 crore.
Other allocations include:
Rural Development at ₹2,73,108 crore
Home Affairs at ₹2,55,234 crore
Agriculture and Allied Activities at ₹1,62,671 crore
Education at ₹1,39,289 crore
Energy at ₹1,09,029 crore
Health at ₹1,04,599 crore
Further spending comprises ₹85,522 crore for urban development, ₹74,560 crore for IT and telecom, and ₹70,296 crore for commerce and industry. Social welfare receives ₹62,362 crore, while scientific departments are allocated ₹55,756 crore.
Tax administration accounts for ₹45,500 crore, external affairs ₹22,119 crore, finance ₹20,649 crore, and development of the North East ₹6,812 crore.
Transfers and fiscal indicators
Total transfers to states and union territories are projected at ₹26.2 lakh crore. The government has accepted the Finance Commission’s recommendation to retain the vertical share of devolution at 41 per cent, with ₹1.4 lakh crore provisioned as grants for FY27.
The fiscal deficit is estimated at 4.3 per cent of GDP, compared with 4.4 per cent in the revised estimates for 2025-26. The debt-to-GDP ratio is projected at 55.6 per cent, with the Centre targeting 50±1 per cent by 2030.
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