The Union Budget 2026–27 sets out a growth-focused and inclusive economic roadmap, with emphasis on public investment, structural reforms and capacity building. Presenting the first Budget prepared at Kartavya Bhawan, the Finance Minister said it is inspired by three Kartavya.
She said the first Kartavya focuses on accelerating and sustaining economic growth. The second Kartavya aims to fulfil people’s aspirations and build their capacity. The third Kartavya aligns with the vision of Sabka Sath, Sabka Vikas.
The Finance Minister described the Budget as Yuva Shakti-driven. She said the government remains committed to supporting the poor, underprivileged and disadvantaged sections. India will continue moving towards Viksit Bharat while balancing ambition with inclusion, she said.
The Finance Minister noted that the global environment remains uncertain. She cited trade disruptions, supply chain challenges and geopolitical tensions. She said new technologies are reshaping production while increasing pressure on resources.
She said over 350 reforms have been rolled out since August 2025. These include GST simplification and notification of labour codes. The Centre is working with states to reduce compliance and regulatory burdens.
Under the growth Kartavya, the Budget proposes interventions across six priority areas. These include manufacturing, infrastructure, MSMEs and long-term energy security. Public capital expenditure has been increased to ₹12.2 lakh crore in FY2026–27.
This marks an increase from ₹11.2 lakh crore in the previous Budget Estimate.The Budget proposes development of seven high-speed rail corridors between major cities.Dedicated freight corridors and national waterways will strengthen cargo movement.
Twenty new national waterways will be operationalised over the next five years. City Economic Regions will be developed based on specific growth drivers. Each region will receive ₹5,000 crore over five years through reform-linked financing.
These measures are expected to support real estate and urban development activity. Sustained infrastructure spending is expected to aid housing and commercial real estate demand. Improved logistics and connectivity may lower construction and development costs.
Stable fiscal signals support long-term real estate investment confidence. The Budget proposes Biopharma SHAKTI with an outlay of ₹10,000 crore. The initiative aims to boost domestic production of biologics and biosimilars.
Three new NIPER institutes will be set up and seven upgraded. Five Regional Medical Hubs will be developed to promote medical tourism. These hubs will integrate healthcare, education and research facilities.
Mental healthcare infrastructure will expand through new and upgraded institutions. The textile sector will receive integrated support for modernisation and skilling. A ₹10,000 crore SME Growth Fund has been proposed to nurture MSME champions. MSME support is expected to strengthen manufacturing and consumer durables supply chains.
Infrastructure-led growth and rising incomes are expected to support consumer demand. Customs duty rationalisation will reduce costs for imported components and capital goods. The services sector gains from logistics, tourism and healthcare reforms.
Tourism will receive support through a structured guide upskilling programme. Ten thousand guides will be trained in collaboration with an Indian Institute of Management. AVGC Content Creator Labs will be set up in schools and colleges nationwide.
The initiative supports employment generation in creative and digital services. Girls’ hostels will be established in every district for STEM institutions. A Khelo India Mission will be launched to transform the sports sector.
The mission will focus on talent development and sports infrastructure. Under the inclusion Kartavya, Bharat-VISTAAR will integrate agricultural platforms using artificial intelligence.
The system will provide customised advisory support to farmers. SHE Marts will support women-led self-help groups through community retail outlets. On fiscal consolidation, the fiscal deficit is estimated at 4.3 percent of GDP in FY2026–27.
The debt-to-GDP ratio is projected to decline gradually. The New Income Tax Act will come into effect from April 2026. Simplified tax rules and forms will be notified shortly.Penalty and prosecution provisions will be rationalised to reduce litigation.
The Budget raises safe harbour thresholds for IT services to ₹2,000 crore. Multiple IT services will be placed under a single tax category. Foreign cloud service providers using Indian data centres will receive tax holidays till 2047.
Hardware and electronics manufacturing will benefit from customs duty exemptions. Capital goods for lithium-ion batteries and critical minerals processing are exempted. These measures support electronics, EVs and energy storage ecosystems. Cargo clearance approvals will move to a single digital window. Customs processes will adopt electronic tracking and risk-based audits.
The Finance Minister said the Budget seeks to strengthen growth, stability and investor confidence. Overall, the Union Budget 2026–27 reinforces the government’s commitment to sustaining economic growth while advancing inclusion and structural reforms. The measures aim to strengthen India’s resilience, support investment and improve ease of doing business amid global uncertainties.
| Category | Key Announcements |
|---|---|
| Theme | Yuva Shakti–driven Budget focused on growth, aspirations and inclusion |
| Three Kartavya | Accelerate and sustain economic growth; build aspirations and capacity; ensure Sabka Sath, Sabka Vikas |
| Growth & Infrastructure | Public capex raised to ₹12.2 lakh crore; seven high-speed rail corridors; new freight corridors and national waterways; City Economic Regions with ₹5,000 crore support |
| Industry & MSMEs | ₹10,000 crore SME Growth Fund; Biopharma SHAKTI with ₹10,000 crore outlay; textile sector modernisation and skilling push |
| Human Capital & Social Sectors | Medical tourism hubs; veterinary education expansion; AVGC labs in schools and colleges; girls’ hostels in every district; Khelo India Mission expansion |
| Agriculture & Inclusion | Bharat-VISTAAR AI platform for farmers; SHE Marts for women entrepreneurs; expansion of mental health infrastructure |
| Tax & Reforms | New Income Tax Act from April 2026; simplified tax rules and reduced litigation; IT sector safe harbour expansion; customs digitisation and faster clearances |
| Fiscal Discipline | Fiscal deficit estimated at 4.3% of GDP; debt-to-GDP ratio on a declining path |
About the Author
