Union Budget 2026-27 Key Highlights at a Glance.

On 1st February 2026, Finance Minister Nirmala Sitharaman presented the Union Budget 2026–27 in both Houses of Parliament, outlining the Government of India’s vision for the nation’s economic priorities in the coming fiscal year. This budget, the first to be prepared in Kartavya Bhawan, is anchored in three core Kartavyas — or duties — focused on accelerating growth, empowering people, and ensuring equitable access to opportunities.

The Budget adopts a balanced approach between expansionary capital investment and fiscal discipline:

• Total expenditure is estimated at ₹53.5 lakh crore, with non-debt receipts of ₹36.5 lakh crore.
• Fiscal deficit is targeted at 4.3% of GDP, signaling continued fiscal consolidation.
• Debt-to-GDP ratio is projected to decline to 55.6%.
• Gross market borrowings are estimated at ₹17.2 lakh crore.

These numbers underline the government’s commitment to fiscal responsibility while sustaining growth and public investment.

A key pillar of Budget 2026–27 is a renewed push towards manufacturing excellence and supply-chain resilience. Under the First Kartavya, six major interventions were announced:

A). Biopharma SHAKTI Mission:

With an outlay of ₹10,000 crore over five years, the mission aims to establish India as a global biopharmaceutical manufacturing hub, supported by new institutes and accredited clinical trial sites.

B). India Semiconductor Mission (ISM) 2.0:

A comprehensive mission to build semiconductor manufacturing capability—including design, materials, equipment, and talent development—marking a major strategic focus.

C). Electronics & Component Ecosystem:

The outlay for the Electronics Components Manufacturing Scheme has been increased to ₹40,000 crore, supporting deeper local value addition.

D). Rare Earth Corridors:

Dedicated corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu will enhance mining, processing, and manufacturing of rare-earth materials—critical for advanced technologies.

E). Chemical, Capital Goods & Container Manufacturing:

New chemical parks, enhanced construction equipment schemes, and a ₹10,000 crore container manufacturing plan aim at high-value industrial capacity building.

F). Textiles & Fiber Sector Rejuvenation:

Initiatives include a National Fiber Scheme, mega textile parks, and employment programs to modernize traditional clusters with technology and infrastructure upgrades.

To create the “Champion SMEs” of tomorrow:

• A ₹10,000 crore SME Growth Fund has been introduced to support scaling enterprises.
• An additional ₹2,000 crore will be infused into the Self-Reliant India Fund.
• The government will establish “Corporate Mitras” to help MSMEs with compliance and business formalities, particularly in Tier-II and Tier-III towns.

These measures are designed to improve access to capital, deepen liquidity, and unlock growth potential at the grassroots level.

Infrastructure continues to be a growth engine, with several transformative initiatives:

A). High-Speed Rail Network:

The Budget proposed seven high-speed rail corridors connecting major economic cities, including routes like Delhi–Varanasi, Mumbai–Pune, and Hyderabad–Bengaluru.

B|). Dedicated Freight Corridor:

A new Dankuni–Surat freight corridor was announced to boost logistics efficiency and reduce movement costs.

C). Waterways & Shipping:

Plans to operationalize 20 new National Waterways over the next five years will support coastal and inland transport expansion.

D). Infrastructure Risk Guarantee & Urban Investment:

The government also proposed an Infrastructure Risk Guarantee Fund to boost private participation and allocated ₹5,000 crore per City Economic Region (CER) for urban infrastructure upgrades.

The Budget further focuses on simplifying the tax framework and enhancing ease of compliance:

• Tax collected at source (TCS) on overseas tour packages, education and medical remittances has been reduced to 2%, supporting travel and student mobility.
• Extended timelines announced for revised income-tax returns to ease compliance burdens.

While the core income-tax slabs largely remain unchanged, these tweaks aim to boost taxpayer convenience and financial flows.

Several sectors and regions stand to benefit from targeted interventions:

Energy & Green Economy:

Customs duties on critical solar components and battery storage elements were rationalized to accelerate clean energy adoption.

Creative & Digital Sectors:

Budget 2026 gives a special boost to the Animation, Visual Effects, Gaming & Comics (AVGC) industry by supporting institutional capacity and skilling—recognizing the growth potential of creative content.

Healthcare & Medicines:

There’s greater emphasis on health infrastructure, with enhanced funding for national health missions and removal of duties on certain critical drugs—all aimed at improving overall access to affordable care.

Transport & Regional Connectivity:

Uttar Pradesh and other regions will benefit from clean-energy-related incentives and broader connectivity through highways and rail corridors.

Conclusion: A Budget for Growth, Capability & Inclusion

Union Budget 2026–27 balances long-term investments with systemic reforms to support India’s structural transformation. By prioritizing infrastructure, manufacturing ecosystems, MSME support, and inclusive growth models, the Government has aimed to position India for sustained economic resilience while expanding opportunities for individuals and businesses alike.

The focus on strategic industries, digital innovation, regional growth hubs, and skills development signals a nuanced vision—one that aligns with India’s broader ambition to be a global economic and manufacturing powerhouse.

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