Union Budget 2026–27 presented by Finance Minister Nirmala Sitharaman focuses on Yuva Shakti, infrastructure growth, Biopharma SHAKTI, high-speed rail corridors, MSME support, tax reforms and inclusive development amid mixed reactions from industry and opposition.
Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget for the financial year 2026–27 in the Lok Sabha, marking her ninth consecutive Budget presentation. Terming it a “Yuva Shakti-driven Budget,” the Finance Minister outlined an ambitious roadmap aimed at accelerating economic growth, strengthening human capital, and ensuring inclusive development across regions, communities, and sectors.
The Budget comes at a time when India is navigating global economic uncertainties while striving to maintain high growth momentum domestically. Sitharaman emphasized that the Budget is inspired by three central Kartavya—accelerating economic growth, building the capacity of people, and ensuring access to resources, amenities, and opportunities for every family and region under the guiding principle of “Sabka Saath, Sabka Vikas.”
Focus on Youth, Poverty Reduction and Human Capital
Highlighting India’s progress in poverty alleviation, Sitharaman said that the government’s sustained policy efforts have significantly improved the quality of life for millions of citizens. She described the Union Budget 2026–27 as youth-centric, asserting that empowering young Indians with skills, opportunities, and modern infrastructure is essential for achieving long-term prosperity.
“The aspirations of our youth are at the core of India’s growth story,” the Finance Minister said, adding that investment in education, skills, sports, technology, and entrepreneurship would play a critical role in transforming India into a developed nation.
Biopharma SHAKTI to Position India as Global Manufacturing Hub
One of the major announcements in the Budget was the launch of Biopharma SHAKTI, a new initiative with an outlay of ₹10,000 crore over the next five years. The scheme aims to develop India as a global hub for biopharmaceutical manufacturing by strengthening research, innovation, and production capabilities.
The initiative is expected to boost domestic manufacturing, reduce import dependence, create high-skilled jobs, and enhance India’s role in global healthcare supply chains. Industry experts believe the move will attract significant private investment and accelerate growth in life sciences and biotechnology.
Boost for Textiles Through Mahatma Gandhi Gram Swaraj Initiative
Addressing the labour-intensive textile sector, Sitharaman announced the launch of the Mahatma Gandhi Gram Swaraj Initiative to strengthen khadi, handloom, and handicrafts. The initiative seeks to enhance rural livelihoods, preserve traditional crafts, and create employment opportunities, particularly for women and artisans in villages.
The Finance Minister also proposed setting up mega textile parks in challenge mode and introduced a National Fibre Scheme aimed at achieving self-sufficiency in raw materials for the textile industry. These measures are expected to rejuvenate the sector and increase India’s competitiveness in global textile markets.
Seven High-Speed Rail Corridors Announced
Amid thumping of desks by Prime Minister Narendra Modi and members of the ruling benches, Sitharaman announced the development of seven high-speed rail corridors to serve as growth connectors between major cities. The proposed corridors include:
Mumbai–Pune
Pune–Hyderabad
Hyderabad–Bengaluru
Hyderabad–Chennai
Chennai–Bengaluru
Delhi–Varanasi
Varanasi–Siliguri
These corridors are expected to significantly reduce travel time, boost economic activity, and integrate regional markets, while supporting urbanization and industrial growth.
High-Level Committee on Banking for Viksit Bharat
Highlighting the resilience and robustness of India’s financial sector, the Finance Minister announced the formation of a High-Level Committee on Banking for Viksit Bharat. The committee will undertake a comprehensive review of the banking sector to align it with India’s next phase of growth.
The review will focus on safeguarding financial stability, improving financial inclusion, enhancing consumer protection, and strengthening credit delivery to productive sectors. Sitharaman stressed that a strong and responsive banking system is essential for sustaining long-term economic growth.
Technology, AI and Governance Reforms
The Finance Minister underlined the transformative role of technology and artificial intelligence in governance and service delivery. She said the adoption of digital technologies would benefit farmers, women, youth, and persons with disabilities by expanding access to opportunities, markets, and government services.
Emphasizing inclusive digital growth, Sitharaman said the government would continue to leverage technology to improve transparency, efficiency, and accountability in public administration.
Khelo India Mission to Transform Sports Sector
In a major push for sports development, Sitharaman announced the launch of a revamped Khelo India Mission aimed at transforming the sports ecosystem over the next decade. The initiative will focus on nurturing grassroots talent, strengthening sports infrastructure, and creating pathways for young athletes to excel at national and international levels.
The government’s vision, she said, is to make sports a viable career option for youth while promoting fitness and a healthy lifestyle across the country.
Focus on Farmers, Divyangjans and Vulnerable Sections
The Budget also reiterated the government’s commitment to increasing farmers’ incomes, empowering Divyangjans, and ensuring access to mental health and trauma care for vulnerable populations. Special attention has been given to the development of Purvodaya states and the North-Eastern region to accelerate growth, infrastructure creation, and employment opportunities.
Fiscal Deficit, Tax Reforms and Income Tax Act 2025
On the fiscal front, Sitharaman said the fiscal deficit for FY 2026–27 is estimated at 4.3 per cent of GDP, marginally lower than 4.4 per cent in the current financial year. She reaffirmed the government’s commitment to fiscal consolidation while maintaining growth-supportive spending.
The Finance Minister announced an extension of timelines for filing income tax returns. Individuals filing ITR-1 and ITR-2 will continue to have time until July 31, while non-audit business cases and trusts will be allowed to file returns until August 31.
She also announced that the Income Tax Act, 2025, will come into effect from April 1, 2026. Simplified Income Tax Rules and Forms will be notified shortly to provide taxpayers sufficient time to familiarize themselves with the new system.
Six Strategic Sectors and Manufacturing Push
Sitharaman proposed targeted interventions across six key sectors, including scaling up manufacturing in seven strategic and frontier sectors, rejuvenating legacy industries, creating champion MSMEs, delivering a strong push for infrastructure, ensuring long-term economic security, and developing city economic regions.
To support MSMEs, the Finance Minister proposed topping up the Self Reliance India Fund by ₹4,000 crore in FY27 and announced the creation of a dedicated SME Growth Fund.
Record Capital Expenditure to Drive Infrastructure Growth
Public capital expenditure has been raised to ₹12.2 lakh crore for FY 2026–27, up from ₹11.2 lakh crore in the current year. The enhanced capex allocation aims to boost infrastructure development, generate employment, and crowd in private investment, particularly in Tier-2 and Tier-3 cities.
Industry Welcomes Budget, Opposition Voices Criticism
India Inc welcomed the Union Budget 2026–27, describing it as a “budget for the real economy” that enhances India’s global competitiveness while reinforcing a structural reform-led growth strategy. Industry leaders praised the increase in capital expenditure, the launch of Biopharma SHAKTI, and the focus on MSMEs and infrastructure.
However, opposition leaders expressed sharp criticism. Leader of Opposition Rahul Gandhi accused the government of ignoring unemployment, manufacturing slowdown, and agrarian distress. Samajwadi Party chief Akhilesh Yadav said the Budget lacked meaningful reforms and relief for common people.
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West Bengal Chief Minister Mamata Banerjee described the Budget as “directionless and visionless,” alleging that it offered nothing for her state. She claimed allocations for education, social security, and subsidies had been reduced and termed the Budget anti-people and anti-farmer.
Despite the political divide, the Union Budget 2026–27 has set the tone for India’s economic priorities in the coming years, with a strong emphasis on youth empowerment, infrastructure-led growth, and long-term structural reforms.
