Budget 2026-27: How the government earns and spends every rupee
Budget 2026-27 documents show how every rupee is raised and spent, with taxes forming the bulk of revenue and states, interest, and defence dominating expenditure
For every rupee in the government’s coffers, the largest slice—64 paise—will come from direct and indirect taxes, according to the Union Budget 2026-27 documents.
round 24 paise will be raised through borrowings and other liabilities, while 10 paise will come from non-tax revenue such as disinvestment. Non-debt capital receipts will contribute the remaining 2 paise.
Income tax will account for 21 paise per rupee of revenue, followed by corporation tax at 18 paise and Goods and Services Tax (GST) at 15 paise. In addition, the government expects to earn 6 paise from excise duty and 4 paise from customs duty for every rupee collected.
Also Read: Repackaged Budget sops for Bengal irk state players: 'Old wine in new bottle'
Borrowings and other liabilities alone will contribute 24 paise per rupee, as outlined in the Budget presented in Parliament by Finance Minister Nirmala Sitharaman on Sunday. The Budget documents provide a detailed fractional break-up of how every Re 1 is raised and spent.
Where the government earns money
On the expenditure side, the largest outlays are for states’ share of taxes and duties and interest payments, which stand at 22 paise and 20 paise, respectively, for every rupee spent.
Defence expenditure accounts for 11 paise per rupee. Spending on central sector schemes will be 17 paise, while centrally sponsored schemes will receive 8 paise.
Where the money is spent
Expenditure on Finance Commission transfers and other statutory transfers is pegged at 7 paise per rupee. Subsidies will account for 6 paise, while pensions will take up 2 paise.
The government will also spend 7 paise out of every rupee on other miscellaneous expenditures.
(With agency inputs)