Union Budget 2026–27 Highlights: Big Capex, Youth Focus, Simpler Taxes

Presenting the Union Budget 2026–27 in Parliament Today, Finance Minister Nirmala Sitharaman outlined a roadmap focused on economic growth, capacity building and inclusive development, anchored in what she described as three core “Kartavya” or duties of the government.

Calling it a “Yuva Shakti-driven Budget”, Sitharaman said the government’s resolve remains centred on the poor, underprivileged and disadvantaged, while steering India towards the goal of a Viksit Bharat. This is the first Union Budget prepared in Kartavya Bhawan and, according to the finance minister, reflects the government’s renewed commitment to balanced and sustainable growth.

Three Kartavya Framework

The Budget is structured around three guiding principles.
The first Kartavya aims to accelerate and sustain economic growth by improving productivity, competitiveness and resilience amid global uncertainties.
The second Kartavya focuses on fulfilling people’s aspirations by building skills, capacity and opportunities.
The third Kartavya, aligned with the vision of Sabka Saath, Sabka Vikas, seeks to ensure inclusive access to resources, opportunities and public services across regions and communities.

Big Push to the Economy and Infrastructure

Public capital expenditure has been increased to Rs 12.2 lakh crore for 2026–27, up from Rs 11.2 lakh crore last year, signalling continued focus on infrastructure-led growth. The government also announced the development of seven high-speed rail corridors across major cities as “growth connectors” to promote faster and environmentally sustainable passenger travel.

To boost industry, a Rs 10,000 crore SME Growth Fund has been proposed to nurture MSMEs into future national champions, while Biopharma SHAKTI, also with an outlay of Rs 10,000 crore, will help position India as a global hub for biologics and biosimilars.

Focus on Jobs, Skills and Youth

Employment generation and skill development featured prominently. The government announced a nationwide push in sectors such as textiles, MSMEs, hospitality, tourism, sports and creative industries.

An Indian Institute of Creative Technologies in Mumbai will set up AVGC (Animation, Visual Effects, Gaming and Comics) labs in 15,000 schools and 500 colleges, while a Khelo India Mission will be launched to transform India’s sports ecosystem over the next decade.

To support tourism, the government will upskill 10,000 guides across 20 tourist sites and establish a National Institute of Hospitality by upgrading existing institutions.

Support for Women, Farmers and the Vulnerable

Addressing challenges faced by women in higher education, the Budget proposes one girls’ hostel in every district for STEM institutions. For farmers, the focus remains on income enhancement through technology, better advisory services and market access.

A new multilingual AI-based platform, Bharat-VISTAAR, will integrate agricultural databases to provide customised guidance to farmers, helping reduce risks and improve productivity.

Mental health also received attention, with the announcement of NIMHANS-2 and upgrades to mental health institutes in Ranchi and Tezpur.

Tax Reforms and Ease of Living

One of the major announcements was that the New Income Tax Act, 2025, will come into effect from April 2026, with simplified rules and forms aimed at easier compliance for ordinary taxpayers. The government also proposed reducing litigation by rationalising penalties and prosecution provisions.

For individuals, the Budget brings relief through lower taxes on overseas tour packages, reduced customs duty on personal imports, and exemption of basic customs duty on 17 medicines, including drugs for rare diseases.

Boost to Manufacturing and Green Energy

To support domestic manufacturing, customs duty exemptions have been extended to capital goods used in lithium-ion battery production, processing of critical minerals, aircraft manufacturing and renewable energy components. Biogas-blended CNG will also become cheaper due to tax relief.

Regional Focus on North-East and Purvodaya States

The Budget places special emphasis on the North-East and Purvodaya states, with plans for tourism development, Buddhist circuit projects, electric buses and industrial corridors aimed at generating jobs and improving connectivity.

Fiscal Discipline Maintained

Despite higher spending, fiscal discipline remains intact. The fiscal deficit is estimated at 4.3 per cent of GDP, while the debt-to-GDP ratio is projected to decline, freeing up future resources for development.

Also Read: Sitharaman to Present Union Budget for Ninth Consecutive Time Today