Union Budget 2026–27: Key Takeaways for Citizens and Businesses

The Union Budget for 2026-27 is placed after a period of twelve years of continuity in policies, with macroeconomic stability, fiscal responsibility, and economic growth through structural reforms and public spending. The Budget is formulated on the lines of Atmanirbhar Bharat and focuses on the following: “Inclusive policies for jobs, agriculture, and the purchasing power of common people, which will help in achieving economic growth of 7 percent.” The Budget also takes into account the global challenges of trade disruptions, supply chain risks, and technological changes.

Key Highlights:

•          Biopharma SHAKTI is proposed with an outlay of Rs. 10,000 crore (US$ 1.09 billion) over five years to make India a global hub for biologics and biosimilars manufacturing. 
•          Based on the progress made, the India Semiconductor Mission (ISM) 2.0 will be launched to further enhance equipment manufacturing, materials, full-stack Indian IP, and supply chain resilience
•          To tap the benefit of the strong interest expressed by investors, the expenditure under the Electronics Components Manufacturing Scheme has been raised to Rs. 40,000 crore (US$ 4.36 billion).
•          Rare Earth Corridors will be established in the states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to encourage mining, processing, and manufacturing.
•          The production of capital goods will be enhanced by the establishment of new Hi-Tech Tool Rooms, a Construction and Infrastructure Equipment scheme, and a Container Manufacturing Scheme with an outlay of Rs. 10,000 crore (US$ 1.09 billion).
•          To tap the benefit of the strong interest expressed by investors, the expenditure under the Electronics Components Manufacturing Scheme has been raised to Rs. 40,000 crore (US$ 4.36 billion).
•          Rare Earth Corridors will be established in the states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to encourage mining, processing, and manufacturing.
•          The production of capital goods will be enhanced by the establishment of new Hi-Tech Tool Rooms, a Construction and Infrastructure Equipment scheme, and a Container Manufacturing Scheme with an outlay of Rs. 10,000 crore (US$ 1.09 billion).
• Mega Textile Parks will be set up through a challenge route with a focus on technical textiles and higher value addition.
• The Mahatma Gandhi Gram Swaraj Initiative will strengthen khadi, handloom, and handicrafts by improving training, quality standards, branding, and global market access under ODOP.
• To create future Micro, Small and Medium Enterprises (MSME) champions, an SME Growth Fund of Rs. 10,000 crore (US$ 1.09 billion) will be introduced to provide equity support to high-potential enterprises.
• The Self-Reliant India Fund will be topped up by Rs. 2,000 crore (US$ 218 million) to continue supporting micro enterprises with risk capital.
• MSME liquidity will be strengthened by mandating Trade Receivables Discounting System (TReDS) for Central Public Sector Enterprises (CPSEs), enabling Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) backed invoice discounting and securitisation of TReDS receivables.
• Public capital expenditure has been increased to Rs. 12.2 lakh crore (US$ 133.07 billion) in FY27 to sustain infrastructure-led growth.
• An Infrastructure Risk Guarantee Fund will be set up to provide partial credit guarantees and de-risk private investment during the construction phase.
• Green logistics will be promoted through new freight corridors, operationalisation of 20 National Waterways, and a coastal cargo scheme to double modal share by 2047.
• Seven high-speed rail corridors have been announced to act as city-to-city growth connectors and enhance regional economic integration.
• City Economic Regions will be developed with an allocation of Rs. 5,000 crore (US$ 545.36 million) per region over five years through reform-linked financing.
• India’s medical tourism ecosystem will be strengthened through Regional Medical Hubs, Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) expansion, and the addition of over 100,000 allied health professionals.
• Mental and trauma care infrastructure will be expanded through the establishment of National Institute of Mental Health and Neurosciences (NIMHANS)-2, upgrades of institutes in Ranchi and Tezpur, and a 50% capacity increase in district hospitals.
• Youth employability will be enhanced through an Education-to-Employment Standing Committee, Animation, Visual Effects, Gaming and Comics (AVGC) labs in schools, a new design institute, and expanded skilling pathways.
• Capital market reforms include an increase in Securities Transaction Tax (STT) on futures and options and taxation of share buybacks as capital gains to curb arbitrage.
• Fiscal consolidation remains a priority, with the fiscal deficit reduced to 4.3% of GDP, reinforcing the medium-term debt reduction roadmap.
• To attract global digital investment, foreign companies providing cloud services using data centre infrastructure in India will be granted income tax exemption till 2047, subject to servicing Indian customers through a domestic reseller.
• To support India’s IT sector, all IT and IT-enabled services have been brought under a unified category with a safe harbour margin of 15.5%, significantly simplifying transfer pricing compliance.

    Why the Union Budget 2026–27 Deserves Attention

     This budget may not be flashy, but it is practical. It focuses on building strength gradually, supporting growth, and avoiding risky shortcuts. Whether you are a taxpayer, a business owner, a professional, or a student planning ahead, the decisions made here will influence finances and opportunities in the coming years.

   Conclusion

The Union Budget 2026–27 is about steady progress rather than quick wins. Its real impact will unfold over time as policies turn into action. Staying informed helps you make smarter financial choices and better understand the direction India is moving in.