Union Budget 2026: All the key announcements made by the FM 

The Union Budget 2026-27, presented as a “Yuva Shakti-driven” roadmap, focuses heavily on sustaining India’s growth momentum while navigating a volatile global landscape.  

With the government’s “Atmanirbharta” (self-reliance) serving as the guiding “North Star,” the Budget outlines a comprehensive strategy to accelerate economic expansion, targeting a growth rate of 6.5% to 7% for the next fiscal year. Finance Minister Nirmala Sitharaman highlighted the “Reforms Express,” noting that over 350 reforms have already been rolled out to boost productivity and employment.  

The Budget is anchored by three “Kartavyas” (duties): accelerating growth and resilience, fulfilling public aspirations, and ensuring universal access to resources. Key announcements include a massive push for manufacturing in strategic sectors like semiconductors, bio-pharma, and rare earth minerals, alongside a dedicated support structure for creating “champion” MSMEs and rejuvenating legacy industrial clusters. 

Economic Growth Outlook 

The economic projections for the world’s fourth-largest economy remain robust, though slightly moderated compared to the current fiscal year. Economists anticipate a real GDP growth rate of 6.5% to 7% for the upcoming fiscal year, with inflation expected to hover around the Reserve Bank of India’s target of 4%. This translates to a nominal growth projection of 9.5% to 10.5%, a critical figure for estimating government and corporate revenue trajectories.  

The Economic Survey presents a similar outlook, pegging growth between 6.8% and 7.2% for the year starting April 1, a marginal slowing from the estimated 7.4% expansion in the current fiscal year ending March 31. These figures suggest that while the growth engine remains strong, the government acknowledges potential pressures on revenues and the need for prudent fiscal management to sustain momentum. 

Atmanirbharta and Global Integration 

Finance Minister Nirmala Sitharaman reiterated that “Atmanirbharta” (Self-Reliance) remains the government’s “North Star,” a strategy credited with delivering a high growth rate of 7%. However, the Budget explicitly balances this self-reliance with the necessity of global engagement.  

Acknowledging a disrupted external environment where supply chains are fragile, the Minister emphasized that trade and multilateralism remain imperative. The strategy is not isolationist; rather, the FM stressed that India must remain “deeply integrated with global markets.”  

The goal is twofold: to export more aggressively and to attract stable, long-term investments. This approach aims to secure access to critical resources while building domestic resilience, ensuring India navigates global volatility without compromising its developmental sovereignty. 

The Three Kartavyas (Duties) 

Marking the first Budget prepared in “Kartavya Bhavan,” the government outlined three specific “Kartavyas” or duties that inspire its governance philosophy. These duties are designed to deliver on the “Sankalp” (resolve) to focus on the poor, underprivileged, and disadvantaged. 

1. Accelerate and Sustain Growth: The first duty is to enhance productivity and competitiveness while building economic resilience against volatile global dynamics. 

2. Fulfill Aspirations: The second duty focuses on building the capacity of the people, transforming them into active partners in India’s path to prosperity. 

3. Ensure Access: Aligned with the vision of Sabka Saath Sabka Vikas, the third duty guarantees that every family, sector, and region has equitable access to resources, amenities, and opportunities. 

These pillars form the ethical and operational framework for the government’s developmental agenda. 

Strategic Sectors and Technology Push 

A major portion of the Budget is dedicated to scaling up manufacturing in seven strategic and frontier sectors. The Finance Minister highlighted that cutting-edge technologies, including AI, will serve as “growth multipliers.” Key announcements include: 

• Semiconductors & Electronics: An expanded “ISM 2.0” (India Semiconductor Mission) will be launched to develop full-stack Indian IP and materials. The outlay for the Electronic Components Manufacturing Scheme has been increased to ₹40,000 crore. 

• Bio-Pharma: To address the shift towards non-communicable diseases, a “Bio-Pharma Shakti” initiative with an outlay of ₹10,000 crore over five years was proposed. 

• Critical Minerals: A dedicated scheme to establish “rare earth corridors” was announced, supporting mineral-rich states like Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. 

• Infrastructure Equipment: A new scheme to boost domestic manufacturing of construction and infrastructure equipment was also introduced. 

MSME Champions and Industrial Rejuvenation 

Recognizing Micro, Small, and Medium Enterprises (MSMEs) as the backbone of the economy, the Budget proposed a three-pronged approach to help them scale. A specific “SME Growth Fund” with a corpus of ₹10,000 crore was announced to provide equity support and create “champion MSMEs.”  

Additionally, the government proposed topping up the Self-Reliant India Fund with ₹2,000 crore. Beyond new ventures, the FM outlined a plan for the “rejuvenation of 200 legacy industrial clusters,” aiming to modernize traditional sectors. Specific mention was made of the potential for India to emerge as a global hub for sports goods. These initiatives are part of a broader six-step process listed by the FM to keep India ahead, which includes creating city economic regions and ensuring long-term security and stability. 

High-Speed Rail & Infrastructure Push

The Union Budget has outlined a transformative leap in connectivity with the proposal of seven high-speed rail corridors designed to link India’s key economic hubs. These routes—including Mumbai-Pune, Hyderabad-Bengaluru, and Delhi-Varanasi—are envisioned as “growth connectors” that will drastically cut travel time, reduce emissions, and integrate financial, tech, and manufacturing clusters. Complementing this mobility push is a record hike in capital expenditure, raised to ₹12.2 lakh crore for FY27, up from ₹11.2 lakh crore in the previous estimates.

The Finance Minister emphasized a strategic shift towards developing infrastructure in Tier-2 and Tier-3 cities (populations over 5 lakh), ensuring that the growth momentum extends beyond metros. This continued capex aggression signals the government’s intent to use public spending as the primary lever for modernizing India’s urban landscape.

Green Growth & Industrial Modernization

A major thrust for industrial sustainability and innovation defines the sectoral announcements. The Finance Minister proposed a significant ₹20,000 crore outlay over five years for Carbon Capture, Utilization, and Storage (CCUS) technologies, targeting five hard-to-abate sectors: power, steel, cement, refineries, and chemicals. This is paired with a specific focus on “cutting-edge” domains, including a ₹10,000 crore scheme to position India as a global biopharma hub—a move analysts see as a boon for generic and CDMO players like Biocon and Cipla.

Simultaneously, the manufacturing landscape gets a boost with the announcement of mega textile parks. Viewed against the backdrop of the India-EU Free Trade Agreement, these parks aim to enhance scale and efficiency, allowing Indian exporters to integrate deeper into global supply chains.

Banking & Financial Sector Reforms

The financial sector is entering a new phase of consolidation and future-proofing. With banking coverage now exceeding 98% of villages and balance sheets at their healthiest in years, the Finance Minister announced the formation of a high-level committee to chart the roadmap for the banking sector for a “Viksit Bharat.” The focus will be on financial stability, inclusion, and consumer protection to support the next stage of economic growth.

A significant structural reform involves the consolidation of public sector Non-Banking Financial Companies (NBFCs) into larger, stronger entities akin to the Power Finance Corporation (PFC), aiming for greater operational efficiency. Additionally, the government plans to modernize foreign exchange laws regarding non-debt instruments to streamline foreign investment, ensuring the regulatory framework aligns with India’s changing economic priorities.

Culture, Heritage & The ‘Orange Economy’

The Budget places a strong emphasis on leveraging India’s soft power through culture, sports, and the creative arts. A new “Khelo India” mission will be launched to boost sports infrastructure, paralleled by a massive push for the “Orange Economy” (creative industries). Recognizing the need for 2 million AVGC (Animation, Visual Effects, Gaming, Comics) professionals by 2030, the government will establish content creator labs in 15,000 secondary schools and 500 colleges.

Additionally, a new National Institute of Design (NID) will be set up in Eastern India. On the heritage front, 15 archaeological sites, including Sarnath and Hastinapur, will be developed into vibrant destinations. A “Digital Knowledge Grid” will be created to document places of significance, generating a new ecosystem of jobs for local historians and researchers.

Rural Revitalization & Women-Led Enterprise

The government is shifting its rural strategy from basic subsistence to high-value enterprise. A major overhaul of animal husbandry involves adding over 20,000 veterinary professionals through loan-linked subsidies for private colleges and clinics. The focus extends to “high-value agriculture,” specifically supporting crops like coconut and sandalwood to diversify farm incomes. Simultaneously, the “Lakhpati Didi” program is being expanded to transition women from credit-linked livelihoods to actual enterprise ownership. “Self-help entrepreneur marts” will be established as community-owned retail outlets to support this shift. For coastal areas, the fisheries value chain will be strengthened by connecting startups and women-led groups with fish farmer producer organizations, ensuring better market linkages.

Infrastructure: Corridors, Waterways & Risk Mitigation

Beyond the headline capex hike, the Budget introduces structural innovations to secure long-term infrastructure projects. An “Infrastructure Risk Guarantee Fund” is proposed to provide partial credit guarantees to lenders, aimed at easing liquidity and boosting confidence in long-gestation projects. Connectivity remains a priority with the announcement of a new Dedicated Freight Corridor connecting Dankuni in the East to Surat in the West, a critical artery for industrial logistics. The government also plans to operationalize 20 new waterways over the next five years, starting with Odisha. In a unique move to utilize inland water transport, a “ship-repair ecosystem” will be set up in Varanasi and Patna, turning these historic cities into modern logistical hubs.

Tourism & Hospitality Push

The Union Budget continues its aggressive promotion of India as a premier global travel destination, with a specific focus on ecological and cultural tourism. The Finance Minister announced the development of heritage and cultural sites, alongside a unique initiative to host a “Global Big Cat Summit.” This summit is expected to attract state authorities from 95 countries, spotlighting India’s wildlife conservation efforts.

Furthermore, the government plans to curate trekking and hiking experiences and launch a specialized training program for tourist guides at 20 iconic locations to enhance the visitor experience. These measures are viewed as a significant positive for the hospitality sector, likely benefiting hotel chains such as Lemon Tree Hotels, Indian Hotels Company (Taj), ITC Hotels, and EIH Limited. Additionally, travel support companies like Safari Industries, VIP Industries, and IRCTC are expected to see a surge in demand as domestic and inbound tourism strengthens.

Cloud Infrastructure & Data Centers get a Fillip

In a major move to position India as a global digital hub, the Finance Minister proposed a long-term tax holiday for foreign cloud companies that provide services to international clients through Indian resellers. This policy is designed to incentivize large-scale foreign direct investment (FDI) into data centers, thereby strengthening the domestic cloud and digital infrastructure ecosystem.

The ripple effects of this announcement will be felt across the entire infrastructure value chain. Beyond just tech giants, Indian conglomerates and service providers like the Adani Group, Tata Consultancy Services (TCS), and Anant Raj are well-positioned to benefit. The move is also expected to drive demand in allied sectors, including real estate for data center parks, reliable power supply, fiber optic networks, and specialized cooling infrastructure, creating a robust support system for India’s digital economy.