Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget for 2026–27 in Parliament. It is the first Budget prepared at Kartavya Bhawan. And it signals a clear intent: steady growth, simpler rules, and wider participation in India’s development journey.
The Budget is built around three broad ‘kartavayas‘ (duties) the government says will guide its choices this year. The first is to keep the economy growing despite an uncertain global backdrop. The second is to invest in people and equip them to be active participants in that growth. The third is to ensure that development is not uneven, that regions, communities, and sectors are not left behind.
Advertisement
At the same time, the government has signalled that it intends to hold the fiscal line, even as it continues to spend heavily on infrastructure and long-term reforms.
Budget 2026 at a glance: Numbers, priorities and fiscal position
For 2026–27, the government has set total expenditure at Rs 53.5 lakh crore. Non-debt receipts are estimated at Rs 36.5 lakh crore, with the Centre’s net tax collections projected at Rs 28.7 lakh crore.
The fiscal deficit is estimated at 4.3 per cent of GDP, marginally lower than the revised estimate of 4.4 per cent for 2025–26. The debt-to-GDP ratio is expected to ease to 55.6 per cent. Capital expenditure in the revised estimates stands close to Rs 11 lakh crore, reinforcing the government’s investment-led growth strategy.
Key highlights of Union Budget 2026–27
Manufacturing and industry
- A Rs 10,000 crore Biopharma SHAKTI mission over five years to position India as a global manufacturing hub.
- Three new pharmaceutical education institutes and upgrades to seven existing ones.
- Launch of India Semiconductor Mission 2.0 to strengthen equipment, materials and full-stack Indian IP.
- Electronics components manufacturing outlay raised to Rs 40,000 crore.
- Rare earth corridors to support mineral-rich states such as Odisha, Andhra Pradesh and Tamil Nadu.
- Three new chemical parks to be set up through a challenge-based model.
Infrastructure and logistics
- Public capital expenditure raised to Rs 12.2 lakh crore in 2026–27.
- An Infrastructure Risk Guarantee Fund to reduce private sector risk during construction.
- New freight corridors linking eastern and western India.
- Twenty new national waterways to be made operational over five years.
- Coastal cargo incentives to increase inland and coastal shipping share to 12 per cent by 2047.
- Support for seaplane manufacturing and operations to improve regional connectivity.
Cities and mobility
People, skills and services
- A national committee to bridge education, employment and enterprise, with a focus on services.
- Expansion of allied health education to add one lakh professionals over five years.
- Five regional medical hubs to boost medical tourism.
- New institutes for Ayurveda and expansion of veterinary education.
- Creative economy push through AVGC labs in schools and colleges.
- One girls’ hostel planned in every district through viability support.
Farmers and rural economy
- Integrated development of 500 reservoirs and Amrit Sarovars.
- Focus on high-value crops like coconut, cocoa and cashew.
- Launch of Bharat-VISTAAR, a multilingual AI platform integrating agri-data and advisory systems.
Mental health and inclusion
- A second NIMHANS to be set up in north India.
- Upgrades to mental health institutes in Ranchi and Tezpur.
- Skill programmes for Divyangjan in IT, hospitality and creative sectors.
Direct tax reforms
- From April 2026, a new Income Tax Act will come into force. The government says the rules will be simpler, and the forms easier to understand and file for ordinary taxpayers.
- In a relief for accident victims, any interest awarded by motor accident claims tribunals will no longer be taxed. The full amount will go to the individual, without deductions.
- For those sending money abroad, the government has cut tax collection at source rates.
- Overseas tour packages, as well as remittances for education and medical treatment, will now attract lower TCS, easing the immediate cash burden.
- Automated system for nil or lower TDS certificates for small taxpayers.
- Extended timelines for revising returns and staggered filing schedules.
- Decriminalisation of select compliance defaults and rationalised penalties.
Also Read: Budget 2026–27: What changes for accident compensation, foreign travel and education costs
Boost for IT and global investment
- IT, ITeS and contract R&D to be treated under one category with a common safe harbour margin.
- Higher thresholds and faster pricing agreements for IT services.
- Tax holidays for foreign cloud service providers using Indian data centres.
- MAT exemption for non-residents paying tax on a presumptive basis.
Indirect tax and customs reforms
- Duty exemptions for critical minerals, clean energy, nuclear projects and defence aviation.
- Import duties on goods meant for personal use have been cut, and a range of medicines will no longer attract customs duty.
- At the border, the government wants clearances to move faster and with fewer surprises, using digital systems and risk-based AI checks instead of routine physical inspections.
- For small exporters, particularly those selling online, the scrapping of the value cap on courier exports could make it simpler to ship products abroad.
- Customs duty relief has been announced for 17 medicines, including drugs used in cancer treatment, aimed at lowering costs for patients and improving access to critical therapies.
This Budget stays away from splashy giveaways. Instead, it places its faith in slower, structural changes, such as simpler taxes, sustained infrastructure spending, stronger manufacturing capacity and steady investment in people.
