Chapter 3 — February: read the Union Budget and its status words

The Union Budget for 2026–27 was presented in Parliament on 1 February 2026. It is the annual financial plan of the Union Government for the financial year from 1 April 2026 to 31 March 2027. The Budget is useful for examination preparation because it brings together public finance, economic policy, constitutional procedure and current initiatives. It is also a frequent source of errors: candidates mix up budget estimates and actuals, confuse total expenditure with capital expenditure, or remember a scheme's announcement but not its status.

Three stated duties and how to use them

The Budget describes its broad approach through three “kartavyas”: sustaining economic growth and resilience; strengthening people's capacity and aspirations; and widening access to resources and opportunities across households, communities, regions and sectors. These are organising themes, not budget heads. A question asking for a policy proposal may connect it to one of the themes, but the theme itself is not a ministry allocation.

An examination note should separate the framing language from the measurable estimate. If the text says a scheme is intended to improve a sector, record the proposal and its outlay separately. If a budget table gives a percentage of GDP, retain the fiscal year and estimate status. If an item appears in the Budget speech, it is announced or proposed; the implementing order may follow later.

Budget estimates and the scale of the plan

For Budget Estimates (BE) 2026–27, the headline figures include non-debt receipts of ₹36.5 lakh crore, total expenditure of ₹53.5 lakh crore and Centre's net tax receipts of ₹28.7 lakh crore. Gross market borrowings were estimated at ₹17.2 lakh crore; net market borrowings from dated securities were estimated at ₹11.7 lakh crore. The fiscal deficit was estimated at 4.3% of GDP. The debt-to-GDP ratio was estimated at 55.6%, compared with 56.1% in Revised Estimates (RE) 2025–26.

These numbers form a set, not a list of interchangeable amounts. Non-debt receipts do not include borrowing. Total expenditure includes revenue and capital uses. Gross borrowing is not the same as net borrowing because repayment of maturing securities affects the net figure. A percentage of GDP describes a ratio, not the rupee amount. Write the unit and label with each number.

A compact comparison

The table uses rounded headline values from the official summary. The detailed Budget documents contain more precise values. Do not use rounded values to reproduce an exact calculation.

The three deficit terms candidates mix up

Revenue deficit broadly compares revenue expenditure with revenue receipts. It indicates that current revenue is insufficient to meet revenue expenditure. Fiscal deficit is the gap between total expenditure and receipts that do not create debt, before financing. It indicates the government's overall borrowing requirement for the year. Primary deficit is fiscal deficit minus interest payments. It helps show the borrowing requirement apart from the interest burden of past debt.

The words “revenue,” “fiscal” and “primary” answer different questions. A deficit is not automatically evidence of insolvency. It must be read with its scale, financing, debt path, growth and the purpose of expenditure. For a basic exam question, definitions and arithmetic relations matter more than political interpretation.

Capital expenditure and investment language

Capital expenditure generally creates an asset or reduces a liability. It can fund infrastructure such as roads, railways, irrigation, hospitals or public equipment. Revenue expenditure supports recurring operations, services, transfers and maintenance. The classification depends on the budget head, not on whether an item sounds important.

The Union Budget's capital-outlay figures should not be merged without checking whether the source means direct capital expenditure or effective capital expenditure. Effective capital expenditure may include grants-in-aid to states for creation of capital assets. A question may intentionally ask which total includes these grants. Read the definition beside the number.

The 2026–27 Budget also referred to the Sixteenth Finance Commission recommendation to retain the states' vertical share at 41% of the divisible pool, which the Union accepted. “Vertical devolution” concerns the share between the Union and all states as a group. The horizontal distribution formula determines how the states' share is distributed among states. These are different stages. Do not confuse the 41% share with an individual state's own share.

Budget proposals worth recognising

The official summary describes initiatives across manufacturing, technology, health, skills, infrastructure, sports and social support. Examples include Biopharma SHAKTI, India Semiconductor Mission 2.0, a higher outlay for the Electronics Components Manufacturing Scheme, rare-earth corridors, and a sports-goods initiative. The rare-earth corridor proposal explicitly names Andhra Pradesh alongside Odisha, Kerala and Tamil Nadu. This creates an AP connection, but it is a proposal in the Union Budget; it is not proof that a corridor is already operational in the state.

When a question mentions an announced initiative, identify the policy aim and distinguish it from delivery. The budget announcement for Biopharma SHAKTI described an outlay over five years, new National Institutes of Pharmaceutical Education and Research and accredited clinical-trial sites. The semiconductor proposal refers to equipment, materials, intellectual property, research and training. The Electronics Components Manufacturing Scheme outlay was increased to ₹40,000 crore in the summary. For implementation details, consult the relevant ministry guidelines issued after the Budget.

Andhra Pradesh Budget: learn to read a state table

The Andhra Pradesh Finance Department published the 2026–27 Budget volumes, including a 26-page Budget in Brief (Volume VI). Its table compares accounts, revised estimates and budget estimates. For BE 2026–27, the brief gives total receipts and total expenditure of ₹3,32,205.33 crore, revenue expenditure of ₹2,56,142.64 crore, capital expenditure of ₹48,697.71 crore, revenue deficit of ₹22,002.50 crore, fiscal deficit of ₹75,868.09 crore and primary deficit of ₹38,587.54 crore. The same brief reports GSDP of ₹19,75,073 crore and ratios of 1.11% for revenue deficit and 3.84% for fiscal deficit. These are state budget estimates, not final accounts.

The column header determines the status. The same table includes earlier accounts and revised estimates, which can be compared with the new budget estimate only when their periods are kept visible. Do not take a value from the wrong column. Use ₹ crore, not ₹ lakh crore, unless you convert carefully. For instance, ₹3,32,205.33 crore is about ₹3.322 lakh crore, not ₹33.22 lakh crore.

Budget passage is a constitutional and legislative step; it authorises government expenditure under the applicable appropriation. The state's April 2026 order describes release and expenditure controls through a Comprehensive Budget Release Order process. Thus “budget passed,” “funds released,” “expenditure incurred” and “outcome achieved” are not synonyms. The district-level outreach circular shows a dissemination and allocation exercise, not proof that each listed scheme spent its allocation.

February decision notes and later implementation checks

On 13 February, the Prime Minister's Office announced a set of initial decisions after the move to Seva Teerth. Among them were PM RAHAT, a cashless treatment initiative for accident victims with a stated limit up to ₹1.5 lakh; a new target of six crore Lakhpati Didis by March 2029; a doubled Agriculture Infrastructure Fund loan target of ₹2 lakh crore; and Startup India Fund of Funds 2.0 with a corpus of ₹10,000 crore. Preserve “target,” “loan target” and “corpus” exactly. Do not infer individual eligibility conditions from this announcement alone.

A fund-of-funds invests through other funds rather than usually buying start-up shares directly in the same manner as a direct fund. An infrastructure fund's loan target is not a grant to farmers. A women's self-help-group income target is not identical to a count of registered groups. Those distinctions are more valuable than memorising the headline alone.

On 24 February, the Cabinet issued the Seva Sankalp Resolution at its first meeting at the new PMO. In exam notes, this is an institutional and date fact. The designations “Seva Teerth” and “Kartavya Bhawan” are names associated with government office complexes; avoid turning the source's celebratory wording into an objective examination fact.

A five-step budget question method

1. Name the government: Union or Andhra Pradesh.

2. Identify the financial year and stage: BE, RE or actual.

3. Identify the accounting measure: receipts, expenditure, deficit, borrowing or debt.

4. Preserve units and denominator: rupees, crore, GDP or GSDP.

5. Read the question's verb: proposed, estimated, accepted, appropriated, released or spent.

If you practise these steps, a one-number question becomes a classification task. First classify the number and then retrieve it. The method also makes wrong options easier to reject: a state GSDP percentage cannot answer a Union GDP question; a revised estimate cannot answer an actual-outturn question; and an outlay cannot automatically answer a beneficiary-count question.

Visual note

The chapter figure should show the flow: Budget Estimate → Appropriation / legal authorisation → release order → expenditure → outcome reporting. A side panel should contrast BE, RE and actual. It is an original conceptual diagram, not a chart of spending outcomes.

Source note

Sources CA26-001 to CA26-004 and CA26-020 to CA26-024 in the register. Union Budget values are rounded headline figures; the Andhra Pradesh figures are from Budget in Brief Volume VI. Budget proposals and official summaries do not establish implementation outcomes.

Figure 3.1 — Union Budget and fiscal vocabulary. Original teaching visual; schematic, not to scale unless the chapter specifies units.

Original practice questions

1. On what date was the Union Budget 2026–27 presented?

A. 1 February 2026

B. 1 April 2026

C. 13 February 2026

D. 24 February 2026

Answer: A. The Finance Minister presented the Union Budget in Parliament on 1 February 2026. The financial year itself begins on 1 April. [CA26-001]

2. Who presented the Union Budget 2026–27 according to the official PIB summary?

A. The Chairperson of the Finance Commission

B. The Union Finance Minister, Nirmala Sitharaman

C. The Governor of the Reserve Bank of India

D. The Cabinet Secretary

Answer: B. The Ministry of Finance summary identifies Nirmala Sitharaman as the Finance Minister who tabled the Budget. [CA26-001]

3. Which figure is the Union Budget Estimate of total expenditure for FY 2026–27?

A. ₹36.5 lakh crore

B. ₹28.7 lakh crore

C. ₹53.5 lakh crore

D. ₹17.2 lakh crore

Answer: C. Total expenditure was estimated at ₹53.5 lakh crore. The other figures refer to non-debt receipts, net tax receipts and gross market borrowings. [CA26-001]

4. Non-debt receipts in the Union Budget 2026–27 were estimated at:

A. ₹53.5 lakh crore

B. ₹17.2 lakh crore

C. ₹28.7 lakh crore

D. ₹36.5 lakh crore

Answer: D. The official summary gives ₹36.5 lakh crore for non-debt receipts. [CA26-001]

5. The Union's net tax receipts were estimated at which amount for BE 2026–27?

A. ₹28.7 lakh crore

B. ₹36.5 lakh crore

C. ₹53.5 lakh crore

D. ₹11.7 lakh crore

Answer: A. The headline Budget estimate gives ₹28.7 lakh crore for the Centre's net tax receipts. [CA26-001]

6. Which pair correctly gives Union gross and net market borrowings for 2026–27?

A. Gross ₹11.7 lakh crore; net ₹17.2 lakh crore

B. Gross ₹17.2 lakh crore; net dated securities ₹11.7 lakh crore

C. Gross ₹28.7 lakh crore; net ₹36.5 lakh crore

D. Gross ₹53.5 lakh crore; net ₹49.6 lakh crore

Answer: B. The headline estimates are ₹17.2 lakh crore gross and ₹11.7 lakh crore net market borrowings from dated securities. [CA26-001]

7. The fiscal deficit was estimated at what percentage of GDP in Union BE 2026–27?

A. 5.6%

B. 4.4%

C. 4.3%

D. 3.4%

Answer: C. The Budget estimates the fiscal deficit at 4.3% of GDP for 2026–27. The 4.4% figure is the RE for 2025–26. [CA26-001]

8. The Union debt-to-GDP estimate for BE 2026–27 was:

A. 56.1%

B. 41.0%

C. 4.3%

D. 55.6%

Answer: D. The official summary gives 55.6% for BE 2026–27 and 56.1% for RE 2025–26. [CA26-001]

9. Which number belongs to the Revised Estimate of total Union expenditure for FY 2025–26?

A. ₹49.6 lakh crore

B. ₹53.5 lakh crore

C. ₹36.5 lakh crore

D. ₹28.7 lakh crore

Answer: A. ₹49.6 lakh crore is the total-expenditure RE for 2025–26; ₹53.5 lakh crore is the 2026–27 BE. [CA26-001]

10. Which contrast is correct for the two fiscal-deficit estimates highlighted in the Budget?

A. 2025–26 RE: 4.3%; 2026–27 BE: 4.4%

B. 2025–26 RE: 4.4%; 2026–27 BE: 4.3%

C. Both years: 5.6%

D. 2025–26 actual: 3.4%; 2026–27 actual: 4.4%

Answer: B. The source lists 4.4% for RE 2025–26 and 4.3% for BE 2026–27. These are different stages and years. [CA26-001]

11. Which option is one of the three “kartavyas” used to organise the Union Budget's broad approach?

A. Replacing all state budgets with a Union budget

B. Suspending the financial year

C. Sustaining economic growth and resilience

D. Cancelling all public investment

Answer: C. The first stated kartavya is to accelerate and sustain economic growth, productivity and resilience. [CA26-001]

12. Which item is a broad framing theme, rather than a Budget estimate or accounting head?

A. ₹53.5 lakh crore total expenditure

B. ₹28.7 lakh crore net tax receipts

C. 4.3% fiscal deficit

D. Widening access to resources and opportunities across regions

Answer: D. The third kartavya is a broad policy theme; the other options are measurable Budget figures. [CA26-001]

13. The 2026–27 Budget identifies Biopharma SHAKTI with an announced five-year outlay of:

A. ₹10,000 crore

B. ₹1,000 crore

C. ₹40,000 crore

D. ₹2 lakh crore

Answer: A. Biopharma SHAKTI was announced with a ₹10,000 crore outlay over five years. [CA26-001]

14. Which pair of actions was associated with the Biopharma SHAKTI proposal?

A. Two new NIPERs and no clinical-trial network

B. Three new NIPERs, upgrading seven existing ones, and a network of accredited trial sites

C. Three new IITs in every state

D. Replacing all medical colleges with pharmaceutical factories

Answer: B. The official summary mentions three new NIPERs, upgrading seven existing institutes and a network of more than 1,000 accredited clinical-trial sites. [CA26-001]

15. The Electronics Components Manufacturing Scheme outlay was increased to:

A. ₹10,000 crore

B. ₹20,000 crore

C. ₹40,000 crore

D. ₹4.3 lakh crore

Answer: C. The Budget summary gives an increased outlay of ₹40,000 crore. This is an announced scheme allocation, not proof of actual disbursement. [CA26-001]

16. Which state is included in the proposed rare-earth corridor group in the Union Budget 2026–27?

A. Punjab

B. Bihar

C. Goa

D. Andhra Pradesh

Answer: D. The proposal names Odisha, Kerala, Andhra Pradesh and Tamil Nadu. It is a proposal, not evidence that every corridor is already operational. [CA26-001]

17. Which states were named together for dedicated rare-earth corridors?

A. Odisha, Kerala, Andhra Pradesh and Tamil Nadu

B. Gujarat, Punjab, Haryana and Rajasthan

C. Assam, Meghalaya, Tripura and Sikkim

D. Bihar, Uttar Pradesh, Jharkhand and Chhattisgarh

Answer: A. These four mineral-rich states appear in the Budget proposal. [CA26-001]

18. India Semiconductor Mission 2.0 was proposed with attention to:

A. Crop procurement only

B. Equipment, materials, Indian design/IP, supply chains, research and training

C. A census-only mobile app

D. River interlinking alone

Answer: B. The Budget summary links the mission to semiconductor equipment and materials, Indian intellectual property, supply chains, research and workforce training. [CA26-001]

19. What vertical share of the divisible pool did the Union accept on the Sixteenth Finance Commission recommendation?

A. 50%

B. 15%

C. 41%

D. 3.84%

Answer: C. The Budget statement says the Union accepted the recommendation to retain the states' vertical share at 41%. It is not an individual state's share. [CA26-001]

20. Vertical devolution refers primarily to:

A. Allocation between two districts within Andhra Pradesh

B. Distribution among wards of a municipality

C. The division of a state into revenue divisions

D. Sharing tax revenue between the Union and the states as a group

Answer: D. Vertical devolution concerns the Union–states division. Horizontal distribution allocates the states' share among states. [CA26-001]

21. The Andhra Pradesh Budget in Brief gives the 2026–27 BE total expenditure as:

A. ₹3,32,205.33 crore

B. ₹2,56,142.64 crore

C. ₹48,697.71 crore

D. ₹19,75,073 crore

Answer: A. Total expenditure is ₹3,32,205.33 crore. The other figures are revenue expenditure, capital expenditure and estimated GSDP. [CA26-021]

22. The Andhra Pradesh 2026–27 BE GSDP shown in Budget in Brief Volume VI is:

A. ₹3,32,205.33 crore

B. ₹19,75,073 crore

C. ₹75,868.09 crore

D. ₹48,697.71 crore

Answer: B. Volume VI gives estimated state GSDP of ₹19,75,073 crore for BE 2026–27. [CA26-021]

23. Which Andhra Pradesh fiscal-deficit ratio belongs to the state's 2026–27 BE?

A. 1.11% of GSDP

B. 4.3% of India's GDP

C. 3.84% of GSDP

D. 41% of the divisible pool

Answer: C. The state's Budget in Brief shows a fiscal-deficit ratio of 3.84% of GSDP; the 1.11% figure is the revenue-deficit ratio. [CA26-021]

24. The Andhra Pradesh revenue deficit for BE 2026–27 is shown as:

A. ₹75,868.09 crore

B. ₹48,697.71 crore

C. ₹19,75,073 crore

D. ₹22,002.50 crore

Answer: D. Volume VI lists a revenue deficit of ₹22,002.50 crore. [CA26-021]

25. Which pairing correctly describes Andhra Pradesh's 2026–27 BE expenditure figures?

A. Revenue expenditure ₹2,56,142.64 crore; capital expenditure ₹48,697.71 crore

B. Revenue expenditure ₹48,697.71 crore; capital expenditure ₹2,56,142.64 crore

C. Revenue expenditure ₹19,75,073 crore; capital expenditure ₹3,32,205.33 crore

D. Revenue expenditure ₹75,868.09 crore; capital expenditure ₹22,002.50 crore

Answer: A. The state's Budget in Brief lists revenue and capital expenditure separately with these figures. Both are estimates for FY 2026–27. [CA26-021]

26. Which statement correctly describes the Andhra Pradesh Budget in Brief value ₹3,32,205.33 crore?

A. It is the final audited expenditure for the whole state

B. It is the 2026–27 Budget Estimate for total receipts and total expenditure

C. It is the Union's tax devolution percentage

D. It is a five-year central scheme outlay

Answer: B. The Budget in Brief shows total receipts and expenditure balanced at ₹3,32,205.33 crore in BE 2026–27. The value is not an audited actual. [CA26-021]

27. Which legal instrument is named in the Andhra Pradesh Finance Department's April 2026 budget-release order?

A. Census Act 2027

B. Sixteenth Finance Commission Act

C. Appropriation Act No. 3 of 2026

D. Startup India Fund of Funds Act

Answer: C. G.O.Ms.No.19 refers to Andhra Pradesh Appropriation Act No.3 of 2026 and instructions for the 2026–27 release process. [CA26-022]

28. What does the April 2026 Andhra Pradesh Finance order say is needed before departments incur expenditure under the CBRO process?

A. A Padma award list

B. A village census

C. A Parliament vote

D. A Comprehensive Budget Release Order

Answer: D. The state order describes CBRO as a prerequisite in the expenditure-release process. Budget passage and funds release are distinct stages. [CA26-022]

29. Which statement best distinguishes the Andhra Pradesh budget passage from actual spending?

A. Appropriation authorises expenditure under the legal framework; releases and spending are later stages

B. Passage proves every allocation has been spent

C. A Budget Estimate is the same as an audited actual

D. A district outreach meeting is proof of a completed project

Answer: A. The appropriation establishes authorised provision; release orders, expenditure records and outcome reports are separate evidence. [CA26-022, CA26-024]

30. The Andhra Pradesh Budget outreach memo described district and constituency meetings primarily as:

A. A final audit of every scheme

B. A public dissemination exercise for budget goals, priorities and figures

C. A replacement for the Appropriation Act

D. A census operation

Answer: B. The memo describes a budget outreach programme. It does not itself establish expenditure or scheme outcomes. [CA26-024]

31. On 13 February 2026, PM RAHAT was described as providing accident victims with cashless treatment up to:

A. ₹15 lakh

B. ₹15,000

C. ₹1.5 lakh

D. ₹1.5 crore

Answer: C. The PMO/PIB announcement gave an upper cashless-treatment amount of ₹1.5 lakh. Operational eligibility should be checked in later guidelines. [CA26-003]

32. The new Lakhpati Didi target announced in February 2026 was:

A. One crore by March 2027

B. Six lakh by February 2026

C. Ten crore by March 2035

D. Six crore by March 2029

Answer: D. The PMO announcement set a target of six crore by March 2029. A target is not proof of completion. [CA26-003]

33. The Agriculture Infrastructure Fund loan target was doubled from ₹1 lakh crore to:

A. ₹2 lakh crore

B. ₹10,000 crore

C. ₹1.5 lakh crore

D. ₹5 lakh crore

Answer: A. The announcement describes doubling the loan target to ₹2 lakh crore. This is a target, not a direct grant amount. [CA26-003]

34. Startup India Fund of Funds 2.0 was announced with a corpus of:

A. ₹1,000 crore

B. ₹10,000 crore

C. ₹2 lakh crore

D. ₹40,000 crore

Answer: B. The February announcement gives a ₹10,000 crore corpus for Startup India Fund of Funds 2.0. [CA26-003]

35. Which answer best explains a “fund of funds” in this context?

A. A census list of fund beneficiaries

B. A budget deficit measure

C. A fund that can support start-ups indirectly by investing through other funds

D. A direct grant already paid to every new company

Answer: C. A fund of funds channels capital through other investment funds; the announcement does not mean every start-up receives a direct payment. [CA26-003]