2026 Budget Critique: Apparel & Tea Risks Ignored Amid Fiscal Gaps 📈

• The 2026 Budget projects Revenue & Grants at Rs. 5,700 Bn, but the Tax Revenue/GDP ratio is expected to decline from 13.0% (2025) to 12.4% (2026). • The Budget Deficit is projected to widen from Rs. 1.448 Tn (2025) to Rs. 1.7 Tn (2026). Domestic borrowing surges to Rs. 3.630 Tn, raising concerns about crowding out private credit. • Debt-to-GDP is forecast to hover around 99% in 2026. • Financing Risk: Credit growth is largely driven by distress borrowing; pawning advances surged 53% to Rs. 1.3 Tn by Q3 2025, signaling household struggle rather than enterprise investment. • Sectoral Warnings: • Apparel & Textiles faces a potential loss of US$110 Mn–$290 Mn due to the new 30% US tariff, with no mitigation strategy allocated in the Budget. • Tea Industry: Proposed wage hikes (up to Rs. 1,700–2,000/day) lack productivity linkage, threatening unit costs and global competitiveness without sectoral reform. • Misplaced Priorities: The Budget allocates Rs. 12.5 Bn for Government vehicles, compared to only Rs. 3 Bn for public transport. Education funding is cut to 1.2% of GDP—the lowest in South Asia.