The Union Budget 2026–27, presented by Finance Minister Nirmala Sitharaman, outlines India’s long-term growth strategy with a strong focus on youth empowerment, economic expansion, and inclusive development. Built around the vision of Yuva Shakti (Youth Power), the budget is guided by three national duties or Kartavyas — sustaining economic growth, fulfilling the aspirations of citizens, and ensuring development reaches every section of society.
The government’s broader goal is to move India closer to becoming a Viksit Bharat (Developed India) by balancing ambitious economic reforms with social welfare initiatives.
Maintaining Fiscal Discipline While Driving Growth
The government continues to maintain a careful balance between economic expansion and fiscal responsibility. The fiscal deficit for FY 2026–27 is estimated at 4.3% of GDP, slightly lower than the previous year. At the same time, the government has significantly increased public investment, with capital expenditure rising to ₹12.2 lakh crore. This investment aims to sustain economic momentum and create long-term infrastructure assets.
Additionally, India’s debt-to-GDP ratio is expected to decline to 55.6%, reflecting the government’s commitment to maintaining financial stability.
Tax Reforms and Improved Ease of Living
One of the key highlights of the budget is the introduction of the New Income Tax Act, 2025, which will be implemented from April 2026. The new tax framework is designed to simplify compliance and make filing easier for taxpayers.
The government has also provided relief in overseas spending. The Tax Collection at Source (TCS) on international tour packages has been reduced to 2%, along with similar reductions for education and medical remittances abroad.
However, the budget also introduces certain market-related tax changes. The Securities Transaction Tax (STT) has been increased to 0.05% for futures and 0.15% for options, which could slightly impact derivatives trading costs.
In another significant change, tax exemptions on Sovereign Gold Bonds (SGBs) at maturity will now apply only to original investors, affecting secondary market participants. Furthermore, share buybacks will now be taxed as capital gains, with corporate promoters facing an effective tax rate of 22%.
Strengthening Manufacturing and Industrial Growth
The budget places strong emphasis on building domestic manufacturing capabilities and supporting small businesses.
A ₹10,000 crore SME Growth Fund has been proposed to help MSMEs expand and become global competitors. Additionally, the Self-Reliant India Fund receives a ₹2,000 crore boost to support emerging businesses.
Several sector-specific initiatives have also been announced. The Biopharma SHAKTI programme, with an allocation of ₹10,000 crore over five years, aims to strengthen India’s biologics manufacturing capabilities. The government has increased funding for the Electronics Components Manufacturing Scheme to ₹40,000 crore, reinforcing India’s push to become a global electronics manufacturing hub.
The budget also includes ₹10,000 crore to develop a competitive container manufacturing ecosystem and proposes the creation of Rare Earth Corridors in states like Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to support critical mineral processing and supply chain security.
The textile sector will undergo modernization through a comprehensive programme that supports natural fibre production, manufacturing upgrades, and the development of mega textile parks.
Expanding Infrastructure and National Connectivity
Infrastructure development continues to remain a cornerstone of the government’s growth strategy. The budget proposes the development of seven High-Speed Rail corridors, including major routes such as Mumbai-Pune and Delhi-Varanasi, which are expected to significantly improve regional connectivity.
To further strengthen logistics efficiency, the government plans to operationalize 20 new National Waterways over the next five years and expand Dedicated Freight Corridors connecting eastern and western regions of the country.
The aviation sector also receives support, with customs duty exemptions announced for components used in the manufacturing of civilian and training aircraft.
Digital Economy and Technology Growth
India’s digital economy receives a strong push through several forward-looking initiatives. To attract global investments in data infrastructure, foreign cloud service providers using Indian data centres will receive a tax holiday until 2047. The safe harbour threshold for IT services has also been significantly increased from ₹300 crore to ₹2,000 crore.
The government is also investing in the fast-growing Animation, Visual Effects, Gaming, and Comics (AVGC) sector. Under this initiative, Content Creator Labs will be established in 15,000 secondary schools, helping young students develop skills in emerging creative technologies.
Boosting Agriculture and Rural Economy
The agriculture sector is set to benefit from the launch of Bharat-VISTAAR, a multilingual AI-powered platform designed to provide farmers with personalized advisory services and risk management solutions.
The government has also announced special development programmes for high-value crops such as sandalwood, cashew, cocoa, and coconut, aiming to increase export potential and farmer income.
To empower rural women entrepreneurs, the budget introduces SHE-Marts, community-owned retail outlets that will support women-led enterprises in rural areas.
Strengthening Healthcare, Education, and Sports
Healthcare infrastructure receives a major boost with plans to establish NIMHANS-2 and develop five regional medical hubs in partnership with the private sector. These initiatives aim to improve mental healthcare and promote India as a global medical tourism destination.
To support women’s education, the government will establish girls’ hostels in every district, helping female students pursue higher education, particularly in STEM fields.
The sports sector will also witness transformation through a new Khelo India Mission, focused on infrastructure development and talent identification over the next decade.
Customs Relief and Environmental Initiatives
The government has reduced tariffs on goods imported for personal use from 20% to 10%, improving affordability for consumers. Customs duties have also been waived for 17 cancer drugs and capital equipment used in manufacturing lithium-ion batteries.
In line with climate commitments, the budget allocates ₹20,000 crore over five years to support Carbon Capture, Utilization, and Storage (CCUS) technologies, encouraging sustainable industrial development.
The Union Budget 2026–27 reflects a balanced and forward-looking policy framework that combines infrastructure investment, tax reforms, technological advancement, and social empowerment. By focusing on youth development, manufacturing growth, and digital transformation, the budget strengthens India’s journey toward becoming a Viksit Bharat.
With its blend of economic prudence and inclusive development, this budget sets a strong foundation for India’s long-term growth and global competitiveness.