New Delhi: Finance Minister Nirmala Sitharaman on Saturday presented the Union Budget 2026–27 in Parliament, outlining a comprehensive roadmap aimed at accelerating economic growth, building people’s capabilities and ensuring inclusive development in line with the government’s vision of Sabka Sath, Sabka Vikas. Prepared for the first time at Kartavya Bhawan, the Budget is inspired by three core “kartavya” or duties and places strong emphasis on youth-driven growth, social equity and long-term fiscal stability.
Presenting the Budget on the occasion of Magha Purnima and the birth anniversary of Guru Ravidas, the Finance Minister said the government remains committed to advancing towards a Viksit Bharat while balancing ambition with inclusion. She noted that India is navigating a challenging global environment marked by trade disruptions, stressed supply chains and rapid technological shifts that are increasing demand for water, energy and critical minerals.
Three kartavya to guide policy
The first kartavya focuses on accelerating and sustaining economic growth by improving productivity, enhancing competitiveness and strengthening resilience against global volatility. The second kartavya aims to fulfil the aspirations of citizens by building their capacity and enabling them to become active partners in India’s development journey. The third kartavya aligns with the inclusive vision of Sabka Sath, Sabka Vikas, ensuring equitable access to resources and opportunities for all regions, communities and sectors.
The Finance Minister highlighted that over 350 reforms have been rolled out since the Prime Minister’s Independence Day address in 2025, including GST simplification, labour code notifications and rationalisation of quality control orders. High-level committees have been set up and the Centre is working closely with states to reduce compliance burdens and deregulate key sectors.
Push for manufacturing, MSMEs and infrastructure
Under the first kartavya, the Budget proposes targeted interventions across six priority areas, including scaling up manufacturing in seven strategic and frontier sectors, rejuvenating traditional industries, creating “Champion MSMEs”, boosting infrastructure, ensuring long-term energy security and developing city economic regions.
To position India as a global biopharma hub, the government announced the Biopharma SHAKTI initiative with an outlay of ₹10,000 crore over five years. The programme will support domestic production of biologics and biosimilars through new and upgraded National Institutes of Pharmaceutical Education and Research, over 1,000 accredited clinical trial sites and a strengthened drug regulatory framework.
For the labour-intensive textile sector, an integrated programme with five components was announced, covering fibre self-reliance, cluster modernisation, support for handloom and handicrafts, sustainable textile initiatives and upgraded skilling through Samarth 2.0.
Recognising MSMEs as a key growth engine, a dedicated ₹10,000 crore SME Growth Fund was proposed to nurture future champions based on defined performance criteria.
Public capital expenditure has been increased from ₹11.2 lakh crore in Budget Estimates 2025–26 to ₹12.2 lakh crore in 2026–27, continuing the government’s infrastructure-led growth strategy. The Budget also proposes new dedicated freight corridors, operationalisation of 20 national waterways and seven high-speed rail corridors connecting major cities to promote sustainable transport.
Building capacity and fulfilling aspirations
Under the second kartavya, the Finance Minister noted that nearly 25 crore people have exited multidimensional poverty over the past decade. To strengthen human capital, the Budget proposes five regional medical hubs to promote medical tourism, expansion of veterinary education infrastructure and creation of AVGC content creator labs in 15,000 schools and 500 colleges through the Indian Institute of Creative Technologies.
To address challenges faced by girl students in STEM institutions, one girls’ hostel will be established in every district. A National Institute of Hospitality will be set up by upgrading the existing hotel management council, along with a pilot scheme to upskill 10,000 tourist guides in collaboration with an IIM.
The launch of a Khelo India Mission was also announced to transform the sports ecosystem over the next decade through structured talent development, coach training, sports science integration and infrastructure expansion.
Inclusive growth and regional development
Aligned with the third kartavya, the Budget focuses on increasing farmer incomes, empowering vulnerable groups and accelerating development in Purvodaya states and the North-East. The Bharat-VISTAAR initiative, a multilingual AI-based agricultural advisory tool, will integrate AgriStack and ICAR platforms to provide customised support to farmers.
Other measures include setting up Self-Help Entrepreneur Marts, strengthening mental health infrastructure through a second NIMHANS and development of Buddhist circuits and tourism destinations in eastern and northeastern states.
Fiscal consolidation and estimates
The government reaffirmed its commitment to fiscal discipline, projecting the fiscal deficit at 4.3 percent of GDP in 2026–27, down from 4.4 percent in the previous year. The debt-to-GDP ratio is estimated to decline to 55.6 percent. Net market borrowings are pegged at ₹11.7 lakh crore.
Major tax reforms
The New Income Tax Act, 2025 will come into force from April 2026, accompanied by simplified rules and redesigned forms. The Budget proposes rationalisation of penalties and prosecution, reduction in TCS rates, relief under the Liberalised Remittance Scheme and measures to ease compliance for small taxpayers.
Significant incentives were announced for cooperatives, the IT sector and global investors, including higher safe harbour thresholds, tax holidays for foreign cloud service providers using Indian data centres and exemption from Minimum Alternate Tax for non-residents paying presumptive tax.
Customs and indirect tax measures aim to simplify tariffs, support domestic manufacturing and enhance ease of doing business. These include exemptions on critical inputs, reduced tariff rates for personal imports and a shift to a warehouse operator-centric customs framework with digital tracking and risk-based audits.
The Budget also proposes seamless cargo clearance through a single digital window, expansion of non-intrusive scanning using AI and complete removal of the value cap on courier exports to boost e-commerce-led trade.
