FM Nirmala Sitharaman defends budget amid global uncertainty, rejects TN ‘ignored’ charge

Finance Minister Nirmala Sitharaman has defended the Union Budget 2026–27 against criticism from Opposition-ruled states, arguing that policy continuity has remained intact despite an increasingly volatile global environment.

In an interview with Network18 Group Editor-in-Chief Rahul Joshi, she said, “Political stability and our understanding of how to respond to businesses has been the same.”

While maintaining that India’s economic fundamentals are “very strong”, Sitharaman acknowledged that the scale of global uncertainty is unprecedented. “The extent to which global uncertainties are bearing on nations and impacting decision-making is of an order not seen before,” she said, adding that the government had factored in potential risks over the next five years while framing the Budget.

She stressed that Part B of her Budget speech extended well beyond tax proposals. “This time a lot more was said in Part B; it’s not just tax proposals, it’s about taking us to 2047,” she noted, referring to the Centre’s long-term vision aligned with the centenary of Independence.

Textile push amid tariff headwinds

The Finance Minister highlighted targeted measures for the textile sector, aimed at cushioning exporters from external shocks and enhancing competitiveness.

Her remarks come against the backdrop of a steep 50% tariff imposed by the United States administration in late August, which has hit Indian textile exporters. Tamil Nadu, accounting for nearly 28% of India’s textile exports, has been particularly affected.

According to official data, the textile and apparel industry contributes 2.3% to India’s GDP, 13% to industrial production and 12% to total exports. Tamil Nadu and West Bengal remain key production and export hubs.

‘Sad commentary’

With Tamil Nadu, Kerala, Assam, West Bengal and Puducherry headed for Assembly elections, the Budget’s geographic focus has drawn political scrutiny. Sitharaman rejected suggestions of bias, asserting that the Centre’s approach towards states has been consistent and business-oriented.

Responding to Tamil Nadu Chief Minister MK Stalin’s allegation that the state has been sidelined, she termed the charge a “sad commentary”.

She cited allocations under major schemes and infrastructure spending as evidence of support: ₹95,000 crore under the VB G Ram G Act component and ₹30,000 crore for MNREGA, taking the combined allocation to ₹1,25,000 crore.

“These allocations benefit Tamil Nadu and Kerala,” she said, adding that super-fast and high-speed rail projects, rural employment spending and sectoral incentives would generate tangible spillovers.

The Centre has also earmarked ₹40,000 crore for semiconductor and electronics manufacturing — sectors in which Tamil Nadu has emerged as a significant investment destination.

On the evolving political dynamics in the state, Sitharaman suggested that the ruling DMK’s concerns were driven more by electoral considerations than fiscal realities. Referring to actor-turned-politician Vijay, she remarked, “If he is a threat to the ruling DMK, I shouldn’t be worried.”