New Delhi, Feb 1,2026: Finance Minister Nirmala Sitharaman presented the union Budget for 2026-27 in the Lok Sabha on Sunday, emphasising India’s sustained economic growth and resilience amid global uncertainties.
Highlighting a strong macroeconomic stability with a growth rate of around 7 pc, she said, “The Modi government has decisively chosen action over ambivalence, delivering reforms that have improved lives and reduced poverty.”
The Budget focuses on balancing ambition with inclusion, aiming to transform aspiration into achievement. Sitharaman noted, “This is a Yuva Shakti-driven Budget inspired by three duties: to accelerate economic growth, build resilience to global volatility, and ensure inclusive development.”
Key reforms announced include significant steps to build domestic manufacturing capacity, enhance energy security, and cut critical import dependency. The government proposes to boost manufacturing in sectors such as biopharma, semiconductors, textiles, and infrastructure, with dedicated funds like Rs 100 billion for Biopharma Shakti and an expanded Rs 400 billion outlay for electronics manufacturing.
A major thrust is on supporting MSMEs through a three-pronged approach, including a proposed Rs 100 billion SME growth fund and measures to improve liquidity and compliance via TReDS and GeM integration. Infrastructure development will be scaled up with a capital expenditure target of Rs 12.2 trillion and initiatives like 20 new waterways and coastal shipping schemes aimed at boosting trade and connectivity.
On the financial front, the Budget aims to strengthen the banking sector with a new high-level committee for banking reforms and restructuring of key public NBFCs. Tax reforms include the rollout of the new Income Tax Act from April 1, reduced TCS rates for education and medical expenses, and rationalization of prosecution under the Income Tax Act. Notably, tax holidays are extended till 2047 for cloud services from Indian data centers, and safe harbor provisions are enhanced for IT services.
Sitharaman stressed the importance of integrating India with global markets, stating, “India must continue to take confident steps to ensure long-term economic stability while fostering innovation through cutting-edge technology and AI as force multipliers.”
The fiscal deficit for FY27 is pegged at 4.3 per cent of GDP with a debt-to-GDP ratio expected to decline to 55.6 per cent, underscoring the government’s commitment to fiscal prudence. Tax devolution to states continues at 41 per cent, with Rs 1.4 trillion allocated as grants.
The Budget also prioritizes social sectors and employment generation, proposing schemes for medical tourism hubs, upgrading allied health skills, promoting sports goods manufacturing, and supporting vulnerable populations, including women entrepreneurs and the differently-abled.
Finance Minister Sitharaman reaffirmed the government’s reform momentum: “Over 350 reforms have been rolled out since August 15, and the reform express is well on its way to boosting growth, employment, and production across the country.”
