Winning Bizness Desk
Mumbai.Union Finance Minister Nirmala Sitharaman presented the Union Budget 2026–27 in Parliament on Sunday, February 1, outlining the government’s economic roadmap amid global uncertainty. Delivering her ninth consecutive budget speech, which lasted 85 minutes, Sitharaman stressed policy continuity, long-term growth and fiscal discipline. Prime Minister Narendra Modi later described the budget as one that ensures “sab ka vikas” while strengthening India’s manufacturing base and keeping inflation under control.
Economic resilience amid global headwinds
The finance minister said India remains one of the fastest-growing major economies despite geopolitical tensions, supply chain disruptions and sluggish growth in developed nations. She underlined that reforms undertaken over the past decade have strengthened macroeconomic stability, improved energy security and reduced import dependence. According to the government’s assessment, sustained growth of around 7 percent has helped lift millions out of poverty while keeping inflation largely under control over the last 12 years.
Capex-led growth remains central
Capital expenditure once again emerged as the backbone of Budget 2026, with an allocation of ₹12.2 lakh crore for 2026–27, up from ₹11.2 lakh crore last year. Sitharaman said infrastructure spending would continue to act as a growth multiplier by creating jobs, boosting productivity and crowding in private investment. Roads, railways, ports, logistics and urban transport were identified as priority sectors to improve connectivity and reduce transaction costs.
Rail, freight and connectivity push
The budget announced seven high-speed rail corridors, including Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru, Hyderabad–Chennai, Chennai–Bengaluru, Delhi–Varanasi and Varanasi–Siliguri. A new freight corridor was also announced for Dankuni in West Bengal, aimed at improving goods movement. However, the announcement triggered political controversy, with West Bengal Chief Minister Mamata Banerjee claiming the project was a rebranding of an earlier proposal.
Manufacturing and Make in India focus
Strengthening domestic manufacturing was positioned as a strategic priority under the Make in India framework. The budget proposed large textile parks, special corridors for rare earth minerals in Kerala, Tamil Nadu, Odisha and Andhra Pradesh, and the launch of Semiconductor Mission ISM 2.0. Allocation for electronics component manufacturing was raised to ₹40,000 crore to boost domestic value addition and reduce reliance on imports.
Healthcare, pharma and education initiatives
Healthcare received targeted interventions, including the removal of import duty on 17 cancer drugs and medicines for seven rare diseases. Sitharaman announced the opening of three Ayurvedic AIIMS and five medical hubs to promote medical tourism. Under the Bio-Pharma Shakti scheme, ₹10,000 crore has been earmarked to set up three new institutes. The budget also proposed content creator labs in 15,000 secondary schools and 500 colleges.
Urban development and social infrastructure
A major thrust was placed on Tier-2 and Tier-3 cities, with ₹12.2 lakh crore proposed for urban development in cities with populations exceeding five lakh. The aim is to develop cities as economic and trade centres. The budget also announced the construction of girls’ hostels in around 800 districts, with one hostel planned in each district to support female education and workforce participation.
Tax stability with limited relief
While the income tax exemption limit of ₹12 lakh remained unchanged, the finance minister announced limited relief measures for taxpayers. The deadline for filing revised returns has been extended by three months, allowing taxpayers to file until March 31 instead of December 31. Sitharaman reiterated that tax policy would prioritise simplicity, predictability and reduced litigation rather than frequent structural changes.
Political reactions and criticism
The budget drew mixed political reactions. Prime Minister Modi said Budget 2026 lays the foundation for inclusive growth, manufacturing expansion and inflation control. Congress leader Rahul Gandhi criticised the budget, alleging it ignored middle-class distress and failed to address unemployment and rising inequality. West Bengal Chief Minister Mamata Banerjee termed the budget “directionless” and accused the Centre of repackaging old projects while neglecting farmers, women and the poor.
Industry response and outlook
Industry leaders broadly welcomed the infrastructure and MSME focus. Shriram Finance Executive Vice Chairman Umesh Revankar said continued investment in infrastructure and logistics would improve market access and strengthen domestic industry. He added that support for MSMEs, biopharma and food processing could boost rural incomes, while deeper bond markets may expand long-term capital access.
10 key takeaways from Budget 2026
1. Capital expenditure raised to ₹12.2 lakh crore, reinforcing infrastructure-led growth.
2. Seven high-speed rail corridors announced to boost connectivity.
3. No change in income tax slabs; revised return deadline extended to March 31.
4. Import duty removed on 17 cancer drugs and medicines for rare diseases.
5. Semiconductor Mission ISM 2.0 to strengthen chip manufacturing.
6. ₹40,000 crore allocation for electronics component manufacturing.
7. Textile parks and rare earth corridors to support strategic manufacturing.
8. ₹12.2 lakh crore earmarked for Tier-2 and Tier-3 city development.
9. Girls’ hostels planned in around 800 districts nationwide.
10. Strong emphasis on MSMEs, healthcare, skills and long-term economic stability.
