Overall Economic Focus

• Fiscal deficit target around 4.3 % of GDP in FY 2026-27, continuing fiscal consolidation.
• Emphasis on infrastructure-led growth, manufacturing, domestic demand, and policy reforms.

2. Infrastructure & Capital Expenditure

• Capital expenditure increased to ₹12.2 lakh crore to boost infrastructure and economic activity.
• Includes major projects like:
  • Seven high-speed rail corridors linking major cities.
  • Dedicated freight corridors (e.g., Dankuni–Surat).
  • 20 new national waterways over next 5 years.
  • Infrastructure Risk Guarantee Fund to support private sector participation.

3. Manufacturing & Technology

• Strong push for advanced manufacturing:
  • Electronics Component Manufacturing Scheme outlay raised significantly.
  • Bio Pharma Shakti Programme: ₹10,000 crore to boost India as a biopharma hub.
  • Scheme to Promote Semiconductor Manufacturing (ISM 2.0) to deepen chip ecosystem.
  • Container manufacturing scheme to strengthen logistics and exports.

4. Taxation & Regulatory Changes

• New Income Tax Act 2025 to replace the older law from 1 April 2026.
• Tax reforms aimed at simplification and compliance ease.
• STT hike on futures trading (impact on market activity).
• Special tax incentives e.g., tax holiday till 2047 for foreign cloud firms using Indian data centers.

5. Support for MSMEs, Rural & Traditional Sectors

• ₹10,000 crore SME Growth Fund to modernise small enterprises.
• Enhancements for One District One Product (ODOP), khadi, handicrafts & rural industries.
• National Fibre Mission and mega textile parks to drive textile sector growth.

6. Education, Women & Social Initiatives

• Scheme to build one girls’ hostel in every district via viability gap funding.

7. Connectivity & Regional Growth

• Focus on Tier-II & Tier-III cities with infrastructure projects.
• Enhanced logistics via waterways, coastal shipping and enhanced freight movement.

8. Sector-Specific Takeaways

Healthcare: Increased emphasis on biopharma manufacturing and affordable medications through duty exemptions (e.g., cancer drugs).
Banking & Finance: Reforms for deepening bond markets and banking efficiency.
NRIs: Higher investment limits to boost investment participation.

Summary

The Union Budget 2026-27 prioritises:

• Infrastructure thrust with record capex
• Manufacturing scale-up & tech leadership
• Fiscal discipline with smart tax reforms
• Support for MSMEs, rural sectors and traditional industries
• Policies that strengthen India’s global competitiveness