New Delhi, Feb 1 (.) The union Budget 2026, presented in Parliament by Finance Minister Nirmala Sitharaman, outlined the government’s roadmap to accelerate economic growth, generate employment and strengthen social inclusion, while continuing on the path of fiscal consolidation.
Calling it a “Yuva Shakti–driven Budget”, the Finance Minister said the proposals are anchored in three key responsibilities namely, sustaining high economic growth, fulfilling the aspirations of citizens by building their capacities, and ensuring inclusive development aligned with the vision of Sabka Saath, Sabka Vikas.
The Budget is also the first to be prepared in Kartavya Bhawan, symbolically reflecting the government’s focus on duty and responsibility.
A major thrust has been placed on infrastructure, with public capital expenditure increased to Rs 12.2 lakh crore in FY 2026–27 from Rs 11.2 lakh crore in the previous year.
The government aims to use higher capex to crowd in private investment, boost productivity and create jobs. As part of sustainable mobility initiatives, seven high-speed rail corridors connecting major cities have been proposed as “growth connectors”.
To strengthen manufacturing and emerging sectors, the Budget announced Biopharma SHAKTI, a Rs 10,000 crore initiative to build a robust ecosystem for domestic production of biologics and biosimilars.
The programme will include new and upgraded national pharmaceutical institutes, expanded clinical trial infrastructure and faster regulatory approvals.
In addition, a Rs 10,000 crore SME Growth Fund has been proposed to nurture MSMEs into globally competitive enterprises.
On the taxation front, the Finance Minister announced that the New Income Tax Act, 2025 will come into effect from April 2026, accompanied by simplified tax rules and redesigned forms to improve ease of compliance.
Measures have been proposed to reduce litigation by integrating assessment and penalty proceedings, lowering pre-deposit requirements and decriminalising certain minor offences.
The threshold for availing safe harbour provisions for IT services has been raised significantly, while foreign cloud service providers operating from India will be eligible for tax holidays until 2047.
The Budget also includes several social and human capital initiatives. To support women in education, one girls’ hostel will be established in every district for students in higher education STEM institutions.
The government will set up AVGC content creator labs in 15,000 secondary schools and 500 colleges to prepare youth for careers in animation, gaming and digital media.
A Khelo India Mission has been announced to transform the sports sector over the next decade through talent development, coaching and infrastructure.
Healthcare and mental well-being received attention with proposals to establish NIMHANS-2 and upgrade regional mental health institutes, while tourism and cultural development will be supported through medical tourism hubs and Buddhist circuit projects in the North-East and Purvodaya states.
From a fiscal perspective, the government reaffirmed its commitment to prudence. The fiscal deficit is estimated at 4.3% of GDP for FY 2026–27, slightly lower than the revised estimate of 4.4% for FY 2025–26, while the debt-to-GDP ratio is projected to decline to 55.6%.
Sitharaman said the improving fiscal metrics will gradually free up resources for priority sectors by reducing interest burdens.
Overall, the union Budget 2026–27 seeks to balance ambition with inclusion, focusing on long-term growth, youth empowerment and economic resilience amid global uncertainties. . VK SAS