Asif Iqbal Naik
Jammu/New Delhi, February 1, 2026: Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026–27, outlining an ambitious roadmap focused on accelerating economic growth, boosting manufacturing, strengthening infrastructure and generating employment, while maintaining fiscal discipline.
Presenting the Budget in Parliament, her record 9th budget speech, Sitharaman said India’s economy continues to grow at around 7 per cent, driven by structural reforms, public investment and macroeconomic stability. She reaffirmed the government’s commitment towards building a “Viksit Bharat” with emphasis on inclusive growth, productivity and competitiveness.
A major highlight of the Budget is the sharp increase in capital expenditure to ₹12.2 lakh crore for 2026–27, up from ₹11.2 lakh crore in the previous year, aimed at sustaining momentum in infrastructure development. The government also announced the setting up of an Infrastructure Risk Guarantee Fund to provide partial credit guarantees to lenders and boost private investment.
To strengthen domestic manufacturing, the Finance Minister announced large-scale interventions across strategic sectors including biopharma, semiconductors, electronics, rare earths, chemicals, textiles and capital goods. A Biopharma SHAKTI initiative with an outlay of ₹10,000 crore over five years was unveiled to make India a global hub for biologics and biosimilars, while India Semiconductor Mission 2.0 will focus on equipment, materials and full-stack indigenous design.
Support for MSMEs received a strong push with the announcement of a ₹10,000 crore SME Growth Fund, additional capital for the Self-Reliant India Fund, and expanded liquidity support through TReDS. The government also proposed professional support for small businesses through “Corporate Mitras” to help them meet compliance requirements at affordable costs.
In the transport and logistics sector, new Dedicated Freight Corridors, 20 National Waterways over the next five years and seven High-Speed Rail corridors between major cities were announced. Incentives for seaplane operations and coastal cargo promotion were also proposed to improve connectivity and reduce logistics costs.
The Budget places renewed focus on Tier-II and Tier-III cities through the creation of City Economic Regions, with an allocation of ₹5,000 crore per region over five years to drive localized growth.
On employment and skills, Sitharaman announced a High-Powered “Education to Employment and Enterprise” Standing Committee to align education with industry needs, especially in the services sector. Measures were announced to expand allied health professionals, caregivers, AVGC talent, designers and tourism-related skills. A Khelo India Mission was also unveiled to systematically develop sports talent and infrastructure.
For farmers, the government proposed initiatives in fisheries, animal husbandry and high-value agriculture, along with a Coconut Promotion Scheme and dedicated programmes for cashew, cocoa, sandalwood and dry fruits. A new AI-enabled platform, Bharat-VISTAAR, will provide customised advisory services to farmers.
In social sector initiatives, new schemes were announced for Divyangjan skill development and assistive devices, expansion of mental health infrastructure including NIMHANS-2, and strengthened emergency and trauma care in district hospitals. Special focus was laid on Purvodaya states and the North-East, including Buddhist circuits and tourism development.
On fiscal management, the Finance Minister said the fiscal deficit for 2026–27 is estimated at 4.3 per cent of GDP, continuing the path of consolidation, while debt-to-GDP ratio is projected to decline to 55.6 per cent. Total expenditure for 2026–27 is estimated at ₹53.5 lakh crore, with net tax receipts pegged at ₹28.7 lakh crore.
In taxation, Sitharaman announced that the new Income Tax Act, 2025 will come into effect from April 1, 2026, with simplified rules and forms. Relief measures include lower TCS rates on overseas tours, education and medical expenses, exemption of interest awarded by Motor Accident Claims Tribunals, extended timelines for filing revised returns, and reduced compliance for small taxpayers.
To attract global investment, the Budget proposes tax holidays for foreign cloud service providers using Indian data centres, safe harbour norms for IT services, and incentives for electronics manufacturing. Customs duties were rationalised across several sectors, with exemptions announced for critical medicines, aircraft components, lithium-ion battery inputs and nuclear power projects.
Concluding her speech, the Finance Minister said the Budget seeks to balance growth with inclusion, strengthen India’s economic resilience and ensure that the benefits of development reach every section of society.
