Union Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026-27, laying out an ambitious roadmap centred on higher capital expenditure, manufacturing expansion, services-sector growth and targeted tax reforms, while asserting that the government has chosen “reforms over rhetoric” to sustain India’s economic momentum.
Presenting her ninth Budget and the first ever delivered on a Sunday in independent India, Sitharaman said India’s growth trajectory over the past 12 years has been defined by fiscal discipline, moderate inflation and policy stability, even amid global uncertainty.
The Budget is also the third of the BJP-led NDA government in its third term.
Three duties, six focus areas
Describing the Budget as the first prepared in the new Kartavya Bhavan, the Finance Minister outlined three core “kartavyas” of the government: accelerating economic growth, fulfilling people’s aspirations through capacity-building, and ensuring inclusive access to opportunities across regions and sectors.
To operationalise this vision, the government announced interventions across six broad areas, including scaling up manufacturing in strategic sectors, rejuvenating legacy industries, creating “champion MSMEs”, boosting infrastructure, ensuring long-term energy security and developing City Economic Regions.
Capex push continues
In a major signal of continuity, capital expenditure for FY27 was raised by around 9% to Rs 12.2 lakh crore, aimed at sustaining the infrastructure-led growth strategy. The Finance Minister said the allocation would help maintain momentum in asset creation and crowd in private investment.
Seven new high-speed rail corridors were announced as “growth connectors”, linking Mumbai–Pune, Pune–Hyderabad, Hyderabad–Chennai, Hyderabad–Bengaluru, Chennai–Bengaluru, Delhi–Varanasi and Varanasi–Siliguri, with an emphasis on environmentally sustainable transport.
Manufacturing, semiconductors and rare earths
The Budget announced a Rs10,000 crore investment in the biopharma sector over the next five years, including the establishment of three new National Institutes of Pharmaceutical Education and Research (NIPERs) and the upgradation of seven existing ones. A nationwide clinical trials network of over 1,000 accredited sites will also be created.
Sitharaman launched the India Semiconductor Mission 2.0, aimed at producing semiconductor equipment and materials, developing full-stack Indian intellectual property, and strengthening supply chains. The outlay for the Electronics Components Manufacturing Scheme was increased to Rs 40,000 crore.
In a move with strategic implications, the Centre said it would support Odisha, Kerala, Andhra Pradesh and Tamil Nadu in establishing rare earth corridors for mining, processing and research, as India seeks to reduce dependence on China for critical minerals.
Support for MSMEs and textiles
To strengthen MSMEs, the Budget adopted a three-pronged approach, including a Rs 10,000 crore SME Growth Fund for equity support, a Rs 2,000 crore top-up to the Self-Reliant India Fund, and professional assistance through accredited “Corporate Mitras” to help firms meet compliance requirements.
The labour-intensive textile sector received a boost through an integrated programme covering fibre development, employment generation, handloom and handicrafts, sustainability initiatives and skilling under Samarth 2.0. The government also proposed setting up Mega Textile Parks and initiatives to strengthen khadi and handicrafts.
Services sector and human capital
Announcing a renewed emphasis on the services sector as a driver of ‘Viksit Bharat’, the Finance Minister said India aims to reach a 10% global share in services by 2047. Key initiatives include a High-Powered Education-to-Employment Committee, new allied health institutions, regional medical hubs, three new All India Institutes of Ayurveda, and expanded veterinary education capacity.
Export incentives and tax changes
To boost exports, the Budget increased the limit for duty-free imports of inputs for seafood exports, extended similar benefits to shoe uppers, and relaxed timelines for exporters in the leather and textile sectors.
On the tax front, Sitharaman announced that the new Income Tax Act will come into effect from April 1, 2026. She said simplified rules and redesigned forms would be notified shortly, giving taxpayers adequate time to adapt.
Education allocation up 8%; girls’ hostels planned in every district
The Union Budget 2026–27 has raised the allocation for education by about 8% and announced the setting up of girls’ hostels in every district, a move aimed at improving access to higher education and reducing dropouts among women.
Presenting the Budget in Parliament on Sunday, Finance Minister Nirmala Sitharaman said the lack of safe and affordable accommodation continues to be a major factor behind girls discontinuing education after school, particularly in districts with limited higher education institutions or poor connectivity.
Under the proposal, accoridng to livemint, girls’ hostels will be located near colleges and universities, with a focus on smaller towns and rural areas. The initiative is expected to help boost enrolment in higher education and skilling institutions by easing accommodation constraints after Class XII.
According to a report by livemint, the government has earmarked around Rs10,000 crore for the scheme, to be spent over multiple years. The hostels will be developed in partnership with State governments and local bodies, with priority given to districts that have low female enrolment and high dropout rates.
For 2026–27, the Ministry of Education has been allocated Rs1.39 lakh crore, compared to nearly Rs1.29 lakh crore in the previous Budget.
The Budget also acknowledged the rapid growth of India’s animation, visual effects, gaming and comics (AVGC) sector. The government announced support for the Indian Institute of Creative Technologies, Mumbai, to set up AVGC Content Creator Labs in 15,000 secondary schools and 500 colleges across the country.
Tourism push for Northeast, Buddhist circuits planned; guide training scheme announced
The Union Budget 2026–27 has placed tourism at the centre of its employment and local-economy strategy, with a series of initiatives that include a dedicated push for the Northeast through the development of Buddhist circuits across several States in the region.
Union Finance Minister Nirmala Sitharaman said tourism holds significant potential for employment generation, foreign exchange earnings and the expansion of local economies, particularly in culturally and ecologically rich regions such as the Northeast.
As part of this focus, the government announced a scheme for the development of Buddhist circuits in Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram and Tripura. The initiative will cover the preservation of temples and monasteries and aims to highlight the region’s spiritual and cultural heritage.
The Budget also proposed a pilot scheme to upskill 10,000 tourist guides across 20 iconic tourism sites through a standardised 12-week training program in hybrid mode, in collaboration with an Indian Institute of Management. The scheme is expected to create new employment opportunities for local youth, particularly in tourism-dependent regions.
Sitharaman further announced the setting up of a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology. The proposed institute will act as a bridge between academia, industry and government to train professionals for the hospitality and tourism sector.
A National Destination Digital Knowledge Grid will also be created to digitally document places of cultural, spiritual and historical significance across the country. The initiative is expected to generate employment opportunities for local researchers, historians, content creators and technology partners.
Despite the expanded vision for tourism, the Budget allocation for the sector has seen a marginal decline, from Rs2,541.06 crore in 2025–26 to Rs2,438 crore in 2026–27. The Revised Estimate for 2025–26 stood at Rs1,310.30 crore.
Union Budget 2026 introduces SHE Marts to empower women entrepreneurs
Finance Minister Nirmala Sitharaman highlighted new measures in the Union Budget 2026 to support women entrepreneurs, especially in rural areas. She said, “Building on the success of the Lakhpati Didi programme, I propose to help women take the next step from credit-linked livelihoods to being owners of enterprises.”
The Budget proposes Self-Help Entrepreneur (SHE) Marts, which will be community-owned retail outlets within cluster-level federations. These outlets aim to strengthen market access for rural women-led enterprises, giving local products better visibility. The scheme will help women business owners expand their markets, build brands, and create steady income, while also supporting institutions like self-help groups.
The Lakhpati Didi programme helps rural women start small businesses and earn a steady income of at least Rs 1 lakh a year. The Economic Survey noted that increasing women’s workforce participation to around 55% by 2050 is key to sustaining strong GDP growth.
Nirmala Sitharaman sets record as longest-serving consecutive Finance Minister with ninth budget
Finance Minister Nirmala Sitharaman on Sunday presented her ninth consecutive Union Budget, setting a new record as India’s longest-serving finance minister in continuous service. This achievement puts her close to Morarji Desai’s overall record of 10 budgets, though Desai’s were not consecutive.
Sitharaman took charge in May 2019 and has steered India’s economy through the Covid-19 pandemic and global challenges, making it the fastest-growing major economy. Prime Minister Narendra Modi called her achievement “a matter of pride in India’s parliamentary history.”
Former finance ministers P. Chidambaram and Pranab Mukherjee presented nine and eight budgets respectively, but not consecutively.
Sitharaman also holds the record for the longest budget speech, lasting two hours and 40 minutes in 2020. The budget presentation date was shifted to February 1 from 2017 to allow timely implementation from the start of the fiscal year on April 1.
The Budget was traditionally presented on the last day of February at 5 pm. The timing was changed in 1999 when then finance minister Yashwant Sinha in the Atal Bihari Vajpayee government presented the Budget at 11 am. Since then budgets are presented at 11 am.
PM Modi calls Union Budget 2026 a historic boost to India’s reform agenda
Prime Minister Narendra Modi on Sunday described the Union Budget presented by Finance Minister Nirmala Sitharaman as historic and a highway of immense opportunities that will accelerate India’s “Reform Express.” He said the budget “realises the dreams of the present and strengthens the foundation of India’s bright future,” calling it a strong base for a developed India by 2047.
Modi highlighted the focus on trust-based governance, a human-centric economy, fiscal deficit reduction, inflation control, and coordination of high capital expenditure with growth. He praised measures to boost tourism, especially in the Northeast, and said the budget supports balanced development.
Emphasizing India’s goal to become a $5 trillion economy and the world’s third-largest, Modi called the budget a youth power budget reflecting the dreams and resolve of the youth. He noted initiatives in health, education, tourism, agriculture, and women’s empowerment, and lauded Sitharaman for presenting her ninth consecutive budget, calling it a reflection of Nari Shakti.
(With inputs from agencies)