Budget 2026-27: FM Sitharaman Unveils ₹12.2L Cr Capex, Youth-Led Growth & Tax Overhaul

Union Budget 2026-27 Highlights

Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on February 1, 2026, in Parliament, marking her ninth budget speech themed around “Yuva Shakti-driven growth.” The budget emphasizes three core “kartavyas”: accelerating economic growth, fulfilling aspirations through human capital development, and advancing “Sabka Saath, Sabka Vikas” for inclusive progress.
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Economic Growth Focus

Public capital expenditure rises to ₹12.2 lakh crore for FY27, targeting infrastructure like seven high-speed rail corridors and 20 new national waterways to boost connectivity and logistics. Manufacturing scales in seven strategic sectors, including Biopharma SHAKTI (₹10,000 crore outlay) for biologics production and India Semiconductor Mission 2.0 with ₹40,000 crore. Legacy industrial clusters get rejuvenation via infrastructure upgrades, while MSMEs receive equity and liquidity support as “Champion SMEs.”
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​Infrastructure and Urban Push

Tier II/III cities with over 5 lakh population emerge as growth hubs with focused development, including City Economic Regions (₹5,000 crore per region over five years) on a reform-linked model. Container manufacturing launches with ₹10,000 crore over five years, and rare earth corridors develop in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. Inland water transport expands for efficient links between industrial clusters and ports.
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Healthcare and Social Initiatives

Five Regional Medical Value Tourism Hubs will integrate advanced care, education, and rehab facilities with private sector partnership. Trauma care and mental health facilities upgrade at district levels, alongside Allied Health Professionals expansion for diagnostics and geriatric care. Empowering Divyangjan includes livelihood training and assistive devices; farmer incomes rise via Bharat-VISTAAR for high-value agriculture.
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Tax Reforms

A new Income Tax Act 2025 effective April 2026 simplifies rules and forms for easier compliance, with rationalized penalties and prosecution. IT sector gains unified taxation for software and R&D services, plus tax holidays till 2047 for foreign cloud providers using Indian data centres. Customs simplify tariffs, boost electronics and textiles via duty concessions, and promote energy transition with nuclear and biogas incentives.
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Sectoral Boosts

Textiles launch a five-part integrated program for fibres, clusters, handlooms, eco-textiles, and skilling via Samarth 2.0. Tourism develops 15 archaeological sites, upsills 10,000 guides, and creates a National Destination Digital Knowledge Grid. AVGC sector gets content labs in schools/colleges; Purvodaya plan aids eastern and northeastern states.
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