Presented for the first time from Kartavya Bhawan, the Union Budget 2026–27 is guided by three Kartavya—accelerating growth, fulfilling people’s aspirations and ensuring Sabka Saath, Sabka Vikas—while unveiling sweeping tax, manufacturing, infrastructure and governance reforms.
TFP Bureau, New Delhi, February 1, 2026: Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, on Saturday presented the Union Budget 2026–27 in Parliament, outlining a Yuva Shakti-driven roadmap for India’s transition towards Viksit Bharat. Prepared for the first time at Kartavya Bhawan, the budget is rooted in the government’s firm Sankalp to prioritise the poor, underprivileged and disadvantaged, while sustaining high economic growth through structural reforms, public investment and trust-based governance.
Speaking on the sacred occasion of Magha Purnima and the birth anniversary of Guru Ravidas, the Finance Minister said the budget is inspired by three clearly defined Kartavya that will guide India’s economic and social journey in the coming years.
The first Kartavya, she said, is to accelerate and sustain economic growth by enhancing productivity and competitiveness, while building resilience against volatile global dynamics. The second Kartavya focuses on fulfilling the aspirations of the people and building their capacity, making citizens strong partners in India’s path to prosperity. The third Kartavya, aligned with the vision of Sabka Saath, Sabka Vikas, aims to ensure that every family, community, region and sector has equitable access to resources, amenities and opportunities for meaningful participation in national development.
Presenting the Yuva Shakti-driven Budget, Smt. Sitharaman said India will continue to take confident steps towards becoming a developed nation, balancing ambition with inclusion. She noted that as a fast-growing economy with expanding trade and capital needs, India must remain deeply integrated with global markets, export more and attract stable long-term investment, even as the world faces disruptions in supply chains, trade and multilateral cooperation.
Reform Momentum and Growth Strategy
The Finance Minister highlighted that following the Prime Minister’s announcement on Independence Day 2025, over 350 reforms have already been rolled out, including GST simplification, notification of Labour Codes and rationalisation of mandatory Quality Control Orders. High-level committees have been constituted, while the Centre is working closely with states to reduce compliance burdens and promote deregulation.
Under the first Kartavya, the budget proposes interventions across six key areas—scaling up manufacturing in seven strategic and frontier sectors, rejuvenating legacy industries, creating “Champion MSMEs,” delivering a strong push to infrastructure, ensuring long-term energy security, and developing City Economic Regions.
To position India as a global biopharma manufacturing hub, the government announced Biopharma SHAKTI with an outlay of ₹10,000 crore over five years to build a robust ecosystem for domestic production of biologics and biosimilars. The initiative includes setting up three new National Institutes of Pharmaceutical Education and Research (NIPERs), upgrading seven existing ones, establishing over 1,000 accredited clinical trial sites, and strengthening the Central Drugs Standard Control Organisation to meet global standards.
For the labour-intensive textile sector, an Integrated Programme with five components was unveiled, covering fibre self-reliance, modernisation of traditional clusters, support to handlooms and handicrafts, sustainable textiles, and skill development through Samarth 2.0.
Recognising MSMEs as a vital growth engine, a ₹10,000 crore SME Growth Fund has been proposed to nurture future champions, while public capital expenditure has been enhanced from ₹11.2 lakh crore in BE 2025–26 to ₹12.2 lakh crore in FY 2026–27, continuing the investment-led growth momentum.
Infrastructure, Mobility and Urban Development
To promote environmentally sustainable logistics, the budget proposes new Dedicated Freight Corridors connecting Dankuni in the East to Surat in the West, and the operationalisation of 20 new National Waterways over the next five years. Training institutes will be developed as regional centres of excellence to create skilled manpower for these sectors.
Cities are set to play a larger role in economic growth through the development of City Economic Regions, with an allocation of ₹5,000 crore per region over five years, linked to reforms and performance outcomes.
In passenger mobility, seven high-speed rail corridors—including Mumbai–Pune, Hyderabad–Bengaluru and Delhi–Varanasi—will be developed as “growth connectors” to support environmentally sustainable transport systems.
Building Capacity and Social Infrastructure
Under the second Kartavya, the Finance Minister said nearly 25 crore people have exited multidimensional poverty over the past decade. To build on this progress, the budget proposes five Regional Medical Tourism Hubs in partnership with states and the private sector, combining healthcare, education and research facilities.
To address shortages in veterinary services, a loan-linked capital subsidy scheme has been announced to establish veterinary and para-vet colleges, hospitals and diagnostic facilities. In the creative economy, the Indian Institute of Creative Technologies, Mumbai will set up AVGC content creator labs in 15,000 schools and 500 colleges to meet the growing demand for skilled professionals.
Addressing challenges faced by girl students in STEM institutions, the government announced that one girls’ hostel will be established in every district. In tourism, a National Institute of Hospitality will be set up, along with a pilot scheme to upskill 10,000 tourist guides through a structured 12-week programme in collaboration with an IIM.
The Khelo India Mission will be launched to transform the sports sector over the next decade, focusing on talent identification, coaching, sports science integration and infrastructure development.
Inclusive Development and Regional Focus
Aligned with the third Kartavya, the budget places special emphasis on increasing farmers’ incomes, empowering Divyangjan, strengthening mental health and trauma care, and accelerating development in Purvodaya states and the North-East.
The government announced Bharat-VISTAAR, a multilingual AI-powered platform integrating AgriStack portals and ICAR agricultural practices, aimed at improving farm productivity and providing customised advisory services to farmers.
Building on the Lakhpati Didi programme, Self-Help Entrepreneur (SHE) Marts will be set up as community-owned retail outlets. A NIMHANS-2 will be established, while mental health institutes in Ranchi and Tezpur will be upgraded. The budget also proposes development of the East Coast Industrial Corridor, creation of tourism destinations in Purvodaya states, deployment of 4,000 e-buses, and a dedicated Buddhist Circuit scheme in the North-East.
Fiscal Consolidation and Tax Reforms
On the fiscal front, the government reaffirmed its commitment to consolidation, estimating the fiscal deficit at 4.3 per cent of GDP in BE 2026–27, with the debt-to-GDP ratio projected to decline to 55.6 per cent.
A major reform highlight is the New Income Tax Act, 2025, which will come into effect from April 2026, with simplified rules and redesigned forms to ease compliance. The budget proposes rationalisation of penalties and prosecutions, reduction in litigation, relief for small taxpayers, and a one-time foreign asset disclosure window.
Significant measures were announced to support the IT sector, attract global investment, simplify customs processes, reduce import duties on essential goods, exempt 17 drugs from basic customs duty, and lower tariff rates on personal imports from 20 per cent to 10 per cent. Cargo clearance will be integrated through a single digital window, enhancing Ease of Doing Business.
Overall, the Union Budget 2026–27 presents a comprehensive, reform-oriented and people-centric framework that places youth power, inclusion and sustainability at the centre of India’s growth strategy, reinforcing the government’s resolve to build a resilient, competitive and developed India.
