A detailed policy analysis reveals that for Indian farmers, the Budget has increasingly transformed into a ritual rather than an effective remedy, highlighting systemic issues in agricultural governance and policy implementation.

Unfulfilled Budget Promises

The gap between budget announcements and actual implementation remains a critical concern. The promised increase in Kisan Credit Card limit from ₹3 lakh to ₹5 lakh, announced in the previous year's budget, is yet to be officially notified. This delay exemplifies how budget announcements often remain statements of intent rather than actionable policies.

Agricultural Economics and Subsidy Structure

The analysis reveals significant changes in agricultural arithmetic that challenge existing subsidy frameworks. Agriculture currently grows at approximately 3.00% while population growth has declined to 0.50%, fundamentally altering the economic landscape. Despite this shift, fertilizer subsidy policies continue without corresponding adjustments.

The food security framework shows stark contradictions in targeting:

Crop Insurance and Compensation Challenges

The Pradhan Mantri Fasal Bima Yojana (PMFBY) demonstrates structural issues despite significant government investment. Under the current framework, the Centre and states together contribute 90.00% of the premium costs. However, widespread dissatisfaction persists among both farmers and states regarding claim settlement processes and transparency mechanisms.

Multiple crops have traded below Minimum Support Price (MSP), including:

• Bajra, cotton, gram, groundnut, maize
• Masur, moong, ragi, soybean, urad
• Common vegetables showing price declines of approximately 33.00% despite 4.00% increase in fruit and vegetable output

Currency Impact and Trade Policy

Currency depreciation has provided unintended relief to the agricultural sector. The rupee's movement from ₹60.00 per dollar in 2014 to near ₹90.00 has created natural import barriers and enhanced export competitiveness.

Economic Position and Per Capita Analysis

India's economic standing presents a paradox in global rankings. While the country has achieved the position of world's fourth-largest economy by GDP, its per capita performance tells a different story.

The analysis suggests that farmers will receive higher farm-gate prices only when purchasing power increases, consumption expands, and economic growth becomes more evenly distributed across sectors and regions. The current policy framework requires fundamental restructuring to address these systemic challenges and move beyond the ritual approach toward genuine remedial measures.

Tax policy experts have presented comprehensive recommendations for Budget 2026 to enhance India's mergers and acquisitions environment, particularly with the Income-tax Act, 2025 scheduled for implementation from April 1, 2026. The suggestions aim to address existing regulatory gaps and improve the ease of doing business for M&A transactions.

Fast-Track Demerger Tax Neutrality

A primary recommendation involves extending tax neutrality to fast-track demergers under Section 233 of the Companies Act, 2013. Currently, the Income-tax Act, 2025 provides tax neutrality only to NCLT-approved demergers under Sections 230 to 232, excluding fast-track demergers that enable small or closely held companies to undertake demergers without court approval.

The finance ministry's rationale for excluding fast-track demergers centers on concerns about potential valuation manipulation without court oversight. However, experts argue this approach contradicts the ease of doing business agenda, forcing genuine taxpayers to choose between transaction efficiency and tax benefits.

Contingent Consideration Clarity

Experts emphasize the need for clear taxation guidelines on earn-out, profit-linked, or contingent consideration arrangements that have become increasingly common in M&A transactions. These arrangements tie part of the sale consideration to achieving specific profitability or financial milestones.

The current legal framework lacks clarity on:

• Taxability of contingent payments
• Timing of taxation for such arrangements
• Treatment of milestone-based considerations

Foreign Company Merger Anomalies

The recommendations address existing inconsistencies in foreign company merger taxation. While foreign companies enjoy capital gains tax exemptions on direct or indirect share transfers during mergers with other foreign companies, shareholders of the amalgamating company face potential capital gains liability on share swaps.

This creates an anomaly compared to domestic mergers, which provide exemptions at both company and shareholder levels.

Capital Gains Tax Rate Concerns

The recent capital gains tax regime rationalization introduced higher long-term capital gains tax rates, which experts suggest adversely impacts investor returns and exit efficiency. The increased rates potentially drive investors toward jurisdictions with more favorable tax regimes.

Key concerns include:

• Reduced post-tax returns for investors
• Decreased competitiveness with other investment destinations
• Impact on foreign capital attraction

Experts recommend reducing capital gains tax rates, suggesting restoration of the earlier 10.00% rate to improve India's competitive position in attracting foreign investment.

Strategic Implementation Timeline

With the Income-tax Act, 2025 set for April 1, 2026 implementation, Budget 2026 represents the final opportunity to incorporate these amendments before the new framework takes effect. The recommendations aim to position India as a preferred destination for cross-border M&A activities while maintaining regulatory integrity and supporting corporate growth objectives.