The Union Budget 2026-27

The Union Budget 2026-27 is driven by "Yuva Shakti" and focuses on supporting the poor, underprivileged, and disadvantaged populations. The government’s approach is guided by three kartavya: accelerating economic growth, fulfilling citizen aspirations, and ensuring inclusive development.

Industrial and Economic Growth

• Manufacturing: The government is scaling up seven strategic sectors, including Biopharma SHAKTI (with a Rs 10,000 crore outlay), India Semiconductor Mission 2.0, and Rare Earth Permanent Magnets.

• MSMEs: A three-pronged approach provides equity, liquidity, and professional support to develop "Champion MSMEs".

• Infrastructure: Public capital expenditure is proposed at Rs 12.2 lakh crore, with an Infrastructure Risk Guarantee Fund to bolster private investment. Logistical improvements include new freight corridors and the operationalization of national waterways.

Financial and Fiscal Reforms

• Taxation: A new Income Tax Act, 2025, replaces the 1961 act effective April 1, 2026.

• Fiscal targets: The projected fiscal deficit for 2026-27 is 4.3% of GDP, with real GDP growth estimated at approximately 7%.

• Finance Commission: The government accepted the 16th Finance Commission’s recommendation to maintain the vertical devolution share of central taxes at 41%.

Social and Skill Development

• Education and Employment: A High-Powered "Education to Employment and Enterprise" Standing Committee will be formed to optimize growth and export potential.

• Health: Initiatives include upgrading Allied Health Professional institutions and establishing five Regional Medical Hubs.

• Inclusivity: Targeted programs empower Divyangjan through skill training, women-led enterprises via "SHE-Marts," and accelerated development in the Purvodaya states.