Budget 2026–27: The Road to Continuity, Reform and Future Readiness

Finance Minister Nirmala Sitharaman’s presentation of the Union Budget 2026–27 was more than a routine financial exercise; it was a statement of intent. Delivered in the Lok Sabha on 1 February in an 85-minute address, her ninth consecutive Budget reflected continuity, confidence and clarity. Coming at a time when the global economy is uncertain and supply chains are under stress, the Budget chose optimism backed by reform, discipline and ambition. Anchored in the vision of Viksit Bharat, the Budget seeks to guide India into its next phase of transformation—one that is growth-driven, inclusive and future-ready.Strong Growth Outlook Backed by StabilityThe optimism of the Budget is reinforced by the Economic Survey 2026, presented on 29 January, which projects India’s GDP growth at 7.4% in FY26 and 6.8–7.2% in FY27. These numbers are not just statistical projections; they reflect India’s robust macroeconomic fundamentals, regulatory reforms and renewed private sector confidence. At a time when many economies are slowing down, India continues to stand out as the world’s fastest-growing major economy. The Budget builds on this momentum by balancing fiscal prudence with growth-oriented spending, especially in capital expenditure and strategic sectors.Three Kartavya: The Moral Core of the BudgetIn a deeply symbolic beginning, the Finance Minister said this was the first Budget prepared in Kartavya Bhawan and is inspired by three kartavya (duties). The first is to accelerate and sustain economic growth by improving productivity, competitiveness and resilience. The second is to fulfil people’s aspirations by building their capacity and making them partners in progress. The third is to ensure Sabka Sath, Sabka Vikas, so that every region, community and sector can participate meaningfully in India’s growth story. This framing gives the Budget a human connection—it is not only about numbers but also about people, dignity and opportunity.Manufacturing, MSMEs and Infrastructure: Engines of GrowthUnion Budget 2026–27 places a strong emphasis on scaling up manufacturing across seven strategic and frontier sectors, while also rejuvenating legacy industries. MSMEs, recognised as the backbone of the economy, receive a major boost through a ₹10,000 crore SME Growth Fund, aimed at creating future “Champion MSMEs”. Public capital expenditure continues to be a growth driver. From just ₹2 lakh crore in 2014–15, capex has risen to ₹11.2 lakh crore in 2025–26, and the Budget proposes increasing it further to ₹12.2 lakh crore in 2026–27. This sustained investment in infrastructure generates jobs, boosts demand and strengthens long-term productivity.Railways, Connectivity and New Growth CorridorsOne of the most aspirational announcements is the development of seven high-speed rail corridors, including Mumbai–Pune, Delhi–Varanasi and Chennai–Bengaluru. These corridors are envisioned as “growth connectors” that reduce travel time, enhance mobility and integrate regional economies. Alongside this, the Mumbai–Ahmedabad bullet train project continues to progress, promising to cut travel time to under two hours. Dedicated Freight Corridors, new National Waterways and expanded port connectivity underline the government’s commitment to sustainable and efficient logistics.Technology, Semiconductors and Future IndustriesIn a world facing geopolitical disruptions and chip shortages, India’s push towards self-reliance in technology stands out. The Semiconductor Mission 2.0, with an outlay of ₹8,000 crore, aims to deepen India’s chip manufacturing ecosystem. Rare earth corridors in mineral-rich states and incentives for biopharma manufacturing further strengthen India’s position in critical global supply chains. The Biopharma SHAKTI initiative, with ₹10,000 crore over five years, aims to make India a global hub for biologics and biosimilars, while also strengthening clinical trials and regulatory capacity.Investing in People: Education, Skills and Youth PowerCalling it a Yuva Shakti-driven Budget, the Finance Minister highlighted India’s demographic strength. From setting up girls’ hostels in every district to upgrading hospitality education and launching AVGC Content Creator Labs in schools and colleges, the Budget invests deeply in human capital. The launch of the Khelo India Mission reflects a long-term vision to transform sports into a structured, professional and aspirational sector nurturing talent, creating infrastructure and integrating sports science. Healthcare and mental well-being also receive attention, with the proposal for NIMHANS-2, regional mental health institutes, and five Regional Medical Hubs to promote medical tourism and employment. The third kartavya of inclusion is visible in initiatives for farmers, women, Divyangjan, and underdeveloped regions. Bharat-VISTAAR, a multilingual AI-powered agricultural advisory tool, promises to empower farmers with customised, real-time guidance. Programs like SHE Marts build on the success of Lakhpati Didi, strengthening women-led entrepreneurship.A Budget That Believes in IndiaPrime Minister Narendra Modi described the Budget as historic, reform-driven and human-centric a catalyst for long-term growth. Union Budget 2026–27 reflects that belief: belief in India’s youth, in its entrepreneurs, in its farmers and workers, and in its ability to rise higher on the global economic ladder. More than figures and policies, this Budget carries a message—India is not just aiming to grow faster but to grow better, fairer and stronger on its journey towards Viksit Bharat. Union Budget 2026–27: Key Highlights at a Glance AreaWhat the Budget SaysWhy It Matters Overall VisionBudget guided by Viksit Bharat and three kartavya (growth, people’s capacity, inclusion)Shows the Budget is not just about money, but about people and long-term developmentEconomic GrowthGDP growth projected at 7.4% in FY26 and up to 7.2% in FY27Confirms India remains one of the fastest-growing economiesFiscal DisciplineFiscal deficit at 4.3% of GDP; debt ratio decliningGrowth without losing control over government financesCapital ExpenditureCapex increased to ₹12.2 lakh croreMore roads, railways, jobs and economic activityManufacturing PushFocus on 7 strategic and frontier sectorsStrengthens “Make in India” and reduces dependence on importsMSME Support₹10,000 crore SME Growth FundHelps small businesses grow into big, job-creating companiesSemiconductor Mission 2.0₹8,000 crore allocationBuilds India’s own chip-making ecosystemRare Earth MineralsNew rare earth corridors in key statesSecures critical minerals for future technologiesBiopharma SHAKTI₹10,000 crore to boost biologics and biosimilarsMakes India a global biopharma manufacturing hubTextile SectorNational Fibre Scheme, Samarth 2.0, cluster modernisationBoosts jobs in labour-intensive textile industryInfrastructure – Rail7 new high-speed rail corridors announcedFaster travel, stronger regional economiesBullet TrainMumbai–Ahmedabad bullet train nearing completionIndia enters the global high-speed rail leagueFreight & WaterwaysNew freight corridors and 20 national waterwaysCheaper, greener transport of goodsCity Economic Regions₹5,000 crore per CER over 5 yearsTurns cities into powerful growth enginesEnergy SecurityFocus on renewables, batteries, nuclear and logisticsStable energy for long-term growthMedical Tourism5 Regional Medical Hubs plannedCreates jobs and brings global patients to IndiaVeterinary EducationSupport to add 20,000+ professionalsStrengthens rural economy and animal healthcareAVGC SectorLabs in 15,000 schools and 500 collegesPrepares youth for gaming, animation and digital jobsGirls’ EducationOne girls’ hostel in every districtSupports higher education for girl studentsHospitality & TourismNational Institute of Hospitality, guide trainingImproves tourism quality and employmentSports DevelopmentLaunch of Khelo India MissionSystematic support for sports talent and infrastructureFarmersBharat-VISTAAR AI agri toolSmart, customised advice for farmersWomen EmpowermentSHE Marts under Lakhpati DidiStrengthens women-led businessesMental HealthNIMHANS-2 and regional institutesBetter mental health care accessNorth-East & PurvodayaIndustrial corridor, tourism, e-busesBalanced regional developmentBuddhist CircuitsNew tourism scheme in North-EastBoosts culture, tourism and local jobsDefence Budget₹7.9 lakh crore (21% rise)Stronger national security and defence manufacturingIT SectorUnified IT services category, higher safe harbourMakes India more attractive for global IT businessGlobal InvestmentTax holidays for data centres till 2047Positions India as a global digital hubEase of Doing BusinessSimplified customs, single digital windowFaster trade, less paperworkTax ReformsSimpler Income Tax Act from April 2026Easier compliance for common taxpayersRelief to TaxpayersReduced TCS, extended return revision timelinesLess pressure and more flexibilitySupport to NRIs & YouthOne-time foreign asset disclosure windowEncourages honesty without fearCooperativesMore tax benefits and exemptionsStrengthens farmer and cooperative economy