Finance Minister Nirmala Sitharaman on Saturday presented the Union Budget 2026-27, outlining an ambitious yet fiscally prudent roadmap towards Viksit Bharat, with a sharp focus on economic growth, job creation, manufacturing, services expansion, and ease of living for citizens.
Presenting her 9th consecutive Budget, the Finance Minister anchored the proposals around three kartavyas, accelerating economic growth, fulfilling aspirations through capacity building, and ensuring inclusive development under Sabka Sath, Sabka Vikas.
Economic Growth and Capital Expenditure Push
The government proposed a record capital expenditure of ₹12.2 lakh crore for FY 2026-27, up from ₹11.2 lakh crore in the previous year, reinforcing infrastructure as a key growth driver. Public investment continues to focus on Tier-II and Tier-III cities, freight corridors, waterways, and high-speed rail corridors connecting major economic hubs.
Seven High-Speed Rail corridors , new Dedicated Freight Corridors , and 20 National Waterways aim to enhance logistics efficiency and regional connectivity.
Manufacturing Gets a Strategic Boost
To strengthen domestic manufacturing, the Budget announced large-scale initiatives across seven strategic and frontier sectors , including:
- Biopharma SHAKTI with an outlay of ₹10,000 crore to make India a global hub for biologics and biosimilars
- India Semiconductor Mission 2.0 to deepen design, equipment, and materials capabilities
- Expansion of the Electronics Components Manufacturing Scheme to ₹40,000 crore
- Dedicated Rare Earth Corridors in mineral-rich states
- New schemes for capital goods, container manufacturing, chemicals, textiles, and sports goods
Additionally, 200 legacy industrial clusters will be rejuvenated through infrastructure and technology upgrades.
Strong Support for MSMEs
Recognising MSMEs as the backbone of the economy, the Budget introduced a multi-pronged support framework:
- A ₹10,000 crore SME Growth Fund
- Enhanced TReDS usage with credit guarantees and securitisation
- Creation of ‘Corporate Mitras’ through ICAI, ICSI and ICMAI to assist MSMEs with compliance at affordable costs
Fiscal Consolidation Maintained
Despite higher spending, fiscal discipline remains intact. The fiscal deficit is pegged at 4.3% of GDP for FY 2026-27, continuing the consolidation path. The debt-to-GDP ratio is estimated to decline to 55.6% , reflecting prudent fiscal management.
Major Direct Tax Reforms
A landmark announcement was the implementation of the Income Tax Act, 2025 , effective 1 April 2026 , replacing the six-decade-old law. Key taxpayer-friendly measures include:
- Simplified tax forms and rules
- Extended timelines for revised returns
- Reduced TCS rates on foreign education, medical expenses, and overseas tour packages
- Rationalisation of penalties and decriminalisation of minor offences
- One-time foreign asset disclosure scheme with immunity provisions
The IT sector received a major boost with higher safe harbour thresholds and faster APAs, reinforcing India’s position as a global services hub.
Indirect Tax and Customs Relief
On the indirect tax front, the Budget focused on tariff simplification , export promotion, and ease of living. Highlights include:
- Customs duty exemption on critical minerals, lithium-ion battery inputs, and aircraft components
- Reduction in baggage duty rates for personal imports
- Duty-free imports for select drugs and rare disease medicines
- Trust-based customs clearance with AI-enabled risk assessment
People-Centric Development
Significant allocations were made for:
- Healthcare, allied health professionals, and mental health infrastructure
- Education-to-Employment initiatives for services-led growth
- Tourism, including heritage sites, eco-tourism trails, and medical value tourism
- Agriculture, fisheries, animal husbandry, and high-value crops
- Women-led enterprises, Divyangjan empowerment, and North-Eastern development
Conclusion
Union Budget 2026-27 strikes a careful balance between growth ambition and fiscal responsibility, with reforms aimed at long-term competitiveness, job creation, and inclusive prosperity. With manufacturing, services, infrastructure, and human capital at its core, the Budget reinforces India’s journey towards becoming a developed economy by 2047.
Click here to download the complete speech of Budget 2026-2027
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