The 2026-27 Union Budget is a document that reveals the shifting soul of our Republic. For those of us who have long championed the idea of India as a powerful, cohesive Union of States, the latest fiscal roadmap is not just disappointing—it is a betrayal of the very spirit of nationalism. True nationalism is not found in the loudness of a slogan or the height of a statue; it is found in the fairness with which a nation treats its constituent parts. When that fairness is sacrificed at the altar of short-term political expediency, we aren’t just mismanaging a budget; we are eroding the bedrock of our federal structure.
The sheer irony of the current fiscal narrative is that it seeks to build a ‘Vikasit Bharat’ by penalising the very engines that have powered our journey this far. When we look at the data from states like Maharashtra, Karnataka, Tamil Nadu, Kerala, Telangana, and Andhra Pradesh, we see a disturbing pattern. These are the states that took the national call for progress seriously. They invested in their people, stabilised their populations, and built the industrial and technological backbones that allow India to hold its head high on the global stage. Yet, in the 2026-27 fiscal projections, these states are being treated as nothing more than a resource pool for a Union that seems increasingly uninterested in their long-term growth.
Let us look at the cold mechanics of the 16th Finance Commission’s devolution formula. We are told that we are a ‘One Nation,’ but the distribution of resources suggests a country divided into two classes: the providers and the beneficiaries. While the Commission has introduced a 10 per cent weightage for “Contribution to GDP”—a move that purportedly rewards efficiency—the reality is a sophisticated shell game. Even with marginal increases in the horizontal share for states like Kerala (now at 2.38 per cent) or Karnataka (now at 4.13 per cent), the gap between what they contribute and what they receive remains a canyon. When Maharashtra contributes nearly 15 per cent of the national GDP but receives a pittance back in devolution, it is an affront to the dignity of the taxpayer.
Federalism is a contract of mutual respect and shared growth. When you rewrite that contract to punish those who followed the national mandate—those who controlled their population and educated their workforce—you aren’t just practising poor economics; you are committing a federal sin. The Union’s increasing reliance on cesses and surcharges is perhaps the most cynical aspect of this betrayal. By siphoning an estimated Rs 5.91 lakh crore in FY26 alone into pools not shared with the states, the Centre is running a parallel economy. Since these levies bypass the divisible pool, the “41 per cent share” for states is a 41 per cent share of a pie that the Centre is busy eating from the edges. This is a subversion of the Constitution’s intent, a fiscal manoeuvre that weakens the states to empower a monolithic centre.
The exclusion is not limited to the ledger; it is etched into the very geography of our future. The 2026 infrastructure announcements, particularly regarding the seven high-speed rail corridors, reveal a geography of favouritism. While corridors like Chennai-Bengaluru and Hyderabad-Bengaluru are welcome, the “growth connectors” mysteriously stop where the real logistical potential begins. Where is the high-speed corridor connecting the industrial power sector cities of Coimbatore and Salem to the logistical hubs of Kochi and Mangalore? Why is the recently operationalised Vizhinjam International Seaport—a project of national strategic importance—not being integrated into a high-speed freight or passenger spine?
The healthcare sector tells an even more poignant story of disdain. Kerala, despite possessing a primary health sector, has once again been denied an AIIMS. The state has identified land, cleared hurdles, and pleaded for a tertiary-care institution for years. The denial is a direct message: your excellence in basic health means you don’t deserve advanced central support.
In our current system, a state that fails to manage its population is rewarded with more seats and more money, while a state that succeeds in every developmental metric is threatened with political and financial marginalisation.
However, the fiscal strangulation is merely the preamble. The looming threat of the 2026 Delimitation exercise is the final act. This is where the “Performance Penalty” turns into a total political eclipse. For decades, the South and the West have been the torchbearers of the national family planning mission. We were told it was our patriotic duty to manage our numbers. Now, we are being told that because we succeeded, our voice in the Parliament will be silenced. If seats are redistributed purely based on current population figures, the states that resisted social reform will gain absolute hegemony, while the performers will be reduced to spectators.
Nationalism must be a partnership of equals. The current trajectory is not just unfair; it is unsustainable. You cannot build a world-class economy by alienating the very people who produce the wealth. Fairness is the prerequisite for a united India. If we continue to punish performance and reward stagnation, we are not building a ‘Vikasit Bharat’—we are dismantling the very foundations of our national unity.Let us hope the Centre realises that a nation is only as strong as the trust among its parts and rises above petty electoral politics.