On February 1, 2026, Finance Minister Nirmala Sitharaman presented the Union Budget for 2026–27 in Parliament. The Budget was presented during a time of global economic uncertainty and changing trade and investment conditions. Even with these challenges, the government has focused on steady growth and careful use of public money.

While presenting the Union Budget, the Finance Minister said the government’s goal is to turn people’s dreams into real results. She called this Budget a Yuva Shakti–focused Budget, which supports young people. The Budget gives importance to local manufacturing, the growing service sectors, and better roads, transport, and infrastructure for long-term growth.

She also spoke about the work done so far, saying that the government has brought essential reforms, controlled spending, and kept the economy stable. Under the Atmanirbhar Bharat idea, the focus has been on making more products in India, improving energy security, and reducing dependence on imports.

The Budget also aims to help common people by creating jobs, supporting farmers, increasing household income, and improving access to basic services.

The Union Budget 2026–27 aims to make rules simpler, support businesses, attract investment, and strengthen India’s economy.

Now, let us look at the main focus areas of the Union Budget 2026–27.

Budget Highlights

1) Yuva Shakti–driven growth:

• Turning the energy of young people into jobs and business opportunities.

2) Three Kartavya (Duties) Guiding This Year’s Budget

• Boosting economic growth: Making the economy stronger by improving productivity and competitiveness.
• Supporting people and skills: Improving education, skills, and institutions to help people achieve their goals and build capacity.
• Inclusive development (Sabka Sath, Sabka Vikas): Making sure everyone gets equal opportunities in all regions, communities, and sectors.

3) Investment-Led Development Focus

• Growing manufacturing: Expanding production in essential and new sectors.
• Supporting MSMEs: Making small and medium businesses stronger as key growth and supply-chain partners.
• Strengthening services: Supporting service sectors to create jobs and help the economy grow.

4) Supporting India’s Investment Ecosystem

• More public spending: The government will continue to spend on development to encourage private investment.
• Infrastructure-led growth: Improving roads, transport, and facilities, especially in Tier II and Tier III cities.
• Energy and Environment focus: Supporting clean and secure energy for the future.

5) Making Business and Investment Easier

• Simpler rules and clear taxes: Making laws simpler, ensuring clear taxes, and encouraging trust-based compliance.
• Better foreign investment support: Taking steps to improve foreign direct investment (FDI), portfolio investment, and global business connections.
• Investment Friendliness Index: Starting an Investment Friendliness ranking in 2025 to attract more investment.

Biopharma

The Union Budget 2026–27 focuses on biopharmaceuticals to improve manufacturing in new sectors. The government aims to make India a global biopharma hub by supporting production, research, and development.

1. Biopharma SHAKTI

• Biopharma SHAKTI will help India become a global biopharma hub.
• The government will launch this scheme with a budget of ₹10,000 crore over five years.
• The scheme will support the local production of biologics and biosimilars by building a strong biopharma ecosystem.
• Three new NIPER institutes will be set up, and seven existing institutes will be upgraded.
• To improve clinical research, the government will also create a network of more than 1,000 approved clinical trial sites across the country.

2. Institutional and Talent Capacity Development

• Setting up three new national institutes and improving seven existing institutes to strengthen pharmaceutical education, research, and skill development.
• Matching education and research with industry needs and global standards.

3. Clinical Research and Regulatory Infrastructure

• Creating a network of 1,000 approved clinical trial sites across India.
• Improving regulatory processes to speed up approvals and increase global acceptance of biopharma products made in India.

Manufacturing

The Budget plans to support industries and increase manufacturing in important sectors. Some key initiatives to increase manufacturing in important and new sectors are:

• Biopharma SHAKTI Scheme: To help India become a global centre for biopharma manufacturing.
• India Semiconductor Mission (ISM) 2.0: To grow semiconductor manufacturing and supply chains in India with ₹40,000 crore support.
• Electronics Components Manufacturing Scheme: The Budget will be increased to ₹40,000 crore to boost local manufacturing and support rising investment in the electronics sector.
• Rare Earth Corridors: Creating special zones in some states (Odisha, Kerala, Andhra Pradesh, and Tamil Nadu) to develop rare earth mining and manufacturing.
• Chemical Manufacturing Infrastructure: Helping states build chemical parks to support local chemical production.
• Construction and Infrastructure Equipment (CIE): Helping India make advanced construction and infrastructure machines.
• Container Manufacturing: Starting a scheme with ₹10,000 crore over five years to support container manufacturing and build global-level capacity in India.
• Improving Old Industrial Areas: Helping old industrial areas grow by improving facilities and technology.

Textiles

The Union Budget 2026–27 supports the textile sector by helping create jobs and increase exports. The government plans to modernise the textile industry, promote local fibre production, and improve skills. Integrated Textile Programme:

• National Fibre Scheme: Supporting self-reliance in natural, man-made, and new types of fibres.
• Textile Expansion and Employment Scheme: Helping traditional textile clusters upgrade machines and technology to create more jobs.
• National Handloom and Handicraft Programme: Bringing together existing schemes to support artisans and weavers.
• Eco-Friendly Textile: Supporting eco-friendly textiles that can compete in global markets.
• Samarth 2.0: Teaching better textile skills with help from industry and educational institutions.

These steps aim to increase productivity, add more value, and make India stronger in global textile and apparel markets.

Infrastructure

The Budget gives importance to public spending to improve transport, cities, and industries, and to attract private investment. Main infrastructure steps include:

• Public capital spending: Government spending of ₹12.2 lakh crore in FY27 to continue building roads, railways, and other infrastructure.
• High-speed rail corridors: Developing seven high-speed rail routes to improve travel between cities and support economic growth.
• Inland water transport: Expanding inland water transport by starting 20 new National Waterways to improve logistics and connect industries, mineral areas, and ports.
• Growth of smaller cities: Continuing to develop infrastructure in Tier II and Tier III cities(smaller cities) with over 5 lakh people, as they are growing fast.
• City Economic Regions (CERs): Creating City Economic Regions with ₹5,000 crore per region over five years to boost urban growth through reforms and competition.
• Regional development: Using infrastructure development to support manufacturing clusters, service hubs, and urban economic areas.

MSMEs and Micro Enterprises

The Budget recognises MSMEs as an important source of jobs, exports, and strong supply chains. To help them grow and become more formal, the Budget was introduced to support MSMEs. Some main steps include:

• Champion SMEs: Creating strong SMEs by providing funding, easier loans, and professional guidance.
• Better access to finance: Helping growing businesses get more capital and risk funding.
• Institutional support: Supporting MSMEs to improve compliance and work more efficiently, especially in Tier II and Tier III cities.

Education, Skills and Services-Led Growth

The Union Budget 2026–27 supports the service sector to drive growth, create jobs, and boost exports, with a focus on skills and institutions.

• Education to Employment Committee: Setting up a high-level committee to better connect education with jobs and business opportunities.
• Growth of services sector: Strengthening the services sector to reach a10% share in global markets by 2047.
• Future skills and jobs: Studying the impact of new technologies like AI on jobs and skills, and planning for future workforce needs.
• Simpler tax rules for IT services: Making taxation easier for IT and software services by placing them under one category with common tax rules.

AVGC and Creative Economy

The Budget supports the creative economy by creating skilled jobs and boosting exports. Key steps include:

• Support for AVGC sector: Supporting the Animation, Visual Effects, Gaming, and Comics (AVGC) sector, which is expected to need 20 lakh professionals by 2030.
• Building creative skills: Opening AVGC labs in 15,000 schools and 500 colleges to develop creative skills, with support from the Indian Institute of Creative Technologies, Mumbai.

Climate Technologies and Energy Transition

The Budget supports climate action and clean technologies to reduce pollution in industries.

• Carbon Capture, Utilisation and Storage (CCUS): A new CCUS programme will be supported with ₹20,000 crore over five years. The focus will be on using CCUS technology in five major industries—power, steel, cement, refineries, and chemicals.
• These steps aim to improve energy security and help industries grow in cleaner, more eco-friendly ways.

Healthcare and Medical Tourism

The Budget focuses on improving healthcare services and making India a global centre for medical tourism. Main steps include strengthening the healthcare:

• Expanding AHP institutions: Increasing the number of institutes for Allied Health Professionals to fill skill gaps in important healthcare areas.
• More healthcare roles covered: Supporting training in diagnostics, clinical support, and mental and behavioural health services.
• Stronger talent pipeline: Building a skilled healthcare workforce to meet India’s healthcare needs and support medical tourism.

(a) Economy and Healthcare Support Services

• Building a proper care system for elderly care and related health services.
• Introducing national-level training programmes to train multi-skilled caregivers.
• Improving care quality, meeting the needs of an ageing population, and creating jobs in healthcare and care services.

(b) AYUSH and Indian Traditional Medicine

• Setting up new All India Institutes of Ayurveda.
• Improving AYUSH medicine quality and testing labs to ensure good quality and proper certification.
• Supporting research, training, and global promotion of traditional medicine systems.

(c) Health Infrastructure and Emergency Care

• Expanding emergency and trauma services by opening new centres and improving existing mental health and trauma care facilities.
• Improving district-level healthcare infrastructure to enhance access and strengthen health systems.

(d) Medical Tourism Centres

The government will help states establish five medical tourism hubs in partnership with private entities. These hubs will offer many healthcare services in one place.

• Providing advanced medical and surgical treatment.
• Including medical colleges and research centres.
• Offering testing services, post-treatment care, and rehabilitation facilities.
• Setting up special help centres for patients coming from other countries.

Tourism

The Budget focuses on improving tourism facilities, developing skills, and using digital tools to give visitors a better experience. It also aims to manage tourist places more effectively.

(a) Building Institutions and Skills

• Upgrading the National Council for Hotel Management and Catering Technology to create a National Institute of Hospitality.
• The institute will connect education, industry, and government to train a skilled workforce that meets global hospitality standards.

(b) Tourism Skill Development

• Programme to train 10,000 tourist guides at 20 famous tourist places.
• Providing standard, high-quality training with support from leading educational institutions.

(c) Using Digital Tools for Tourism

• Creating a digital platform to share information about cultural and heritage sites in India.
• Using this platform to improve tourism planning, give visitors better information, and create opportunities for local researchers, content creators, and tech partners.

(d) Developing Tourist Places and Experiences

• Developing 15 archaeological sites into attractive cultural destinations with better visitor access and engaging experiences.
• Promoting nature-based tourism such as mountain trails, turtle trails, and bird-watching trails in selected areas.

(e) Promoting Local and Special Tourism

• Special steps to develop tourism routes in new destinations, including heritage, spiritual, and nature-based tourism areas.
• Linking tourism development with better roads, transport, and regional infrastructure.

These measures help tourism grow, create jobs, and support local development.

Tax Reforms

• Simpler income tax system: Introducing a modern and simplified Income Tax framework with easier rules and forms to make tax filing simple.
• Tax holiday for cloud services: Giving tax relief till 2047 to foreign companies providing cloud services using data centres in India, to make India a global digital hub.
• Less tax disputes: Reducing tax litigation by lowering penalties, removing criminal charges for small offences, and simplifying assessment processes.
• Clear tax rules for IT services: Extending and simplifying safe harbour rules for IT and IT-enabled services to provide clarity on transfer pricing and taxes.
• Support for key sectors: Providing tax benefits to manufacturing, services, and export-focused sectors such as data centres, cloud services, toll manufacturing, and warehousing.
• Support for foreign investment: Simplifying tax rules and giving exemptions for foreign experts and service providers working in India.
• Customs and indirect tax reforms: Simplifying customs and indirect taxes to support clean energy, critical minerals, electronics manufacturing, and exports.
• Stable tax system: Ensuring transparency, stability, and predictability in the tax system to improve investor confidence in the long term.

Customs reforms

• Simpler customs duties: Making the customs tariff system easier to support local manufacturing, boost exports, and fix duty-related problems.
• Removing old exemptions: Slowly ending customs duty exemptions on goods that are already made in India or are rarely imported.
• More transparency: Adding actual duty rates directly into the tariff schedule so businesses clearly know how much tax they need to pay.
• Support for export sectors: Expanding duty-free or lower-duty benefits for export-focused sectors like marine products, leather, textiles, electronics, and clean energy technologies.
• Faster customs clearance: Improving trust-based customs systems with longer duty payment time and easier processes for compliant importers.
• Better customs processes: Making border clearance faster with digital systems.

Conclusion

The Union Budget 2026–27 focuses on growth, jobs, and development. It supports young people, small businesses, farmers, and key sectors like manufacturing, services, healthcare, and tourism. The Budget also improves infrastructure, skills, and digital systems to make life easier for people and businesses.

With simple rules, better tax systems, and support for clean energy and innovation, the Budget aims to build a strong and self-reliant India. Overall, the Union Budget 2026–27 works towards steady growth and a better future for all.