PIB:- Published on 1 FEB 2026
Why Is It in the News?
The Union Finance Minister, Smt. Nirmala Sitharaman, presented the Union Budget 2026-27 in Parliament, emphasizing a Yuva Shakti-driven approach. This budget reflects the government’s “Sankalp” to focus on the poor, underprivileged, and disadvantaged, while simultaneously aiming for India’s economic growth, global competitiveness, and inclusive development.
Notably, this is the first budget prepared in the new Kartavya Bhawan, inspired by three core kartavyas: accelerating economic growth, fulfilling citizens’ aspirations and building their capacity, and ensuring inclusive development under the vision of Sabka Sath, Sabka Vikas.
The Finance Minister highlighted that India’s growing economy must navigate a complex external environment characterized by disrupted global supply chains, volatile trade dynamics, and rapidly evolving technologies. With over 350 reforms rolled out since Independence Day 2025, including GST simplification, labour code notifications, and rationalization of mandatory quality control orders, the government continues to prioritize ease of doing business and reduction in compliance burdens.
Three Kartavyas: The Guiding Principles of Budget 2026-27
The first kartavya aims to accelerate and sustain economic growth, with emphasis on enhancing productivity, competitiveness, and building resilience against global uncertainties. The second kartavya focuses on fulfilling the aspirations of people and building their capacities, thereby enabling citizens to become active partners in India’s prosperity journey.
The third kartavya, aligned with the vision of Sabka Sath, Sabka Vikas, focuses on inclusive growth, ensuring every family, community, region, and sector has access to resources, amenities, and meaningful opportunities. By combining these three principles, the Yuva Shakti-driven budget aims to create a balanced approach, targeting economic ambition without compromising social inclusion.
Part A: Accelerating and Sustaining Economic Growth
Under Part A of the Budget 2026-27, the government focuses on accelerating and sustaining economic growth through strategic interventions in manufacturing, infrastructure, MSMEs, and key industrial sectors. The initiatives aim to enhance competitiveness, create jobs, and strengthen India’s position as a global economic hub.
To establish India as a global hub for Biopharma manufacturing, the government announced Biopharma Shakti with an outlay of ₹10,000 crore over five years. The initiative will:
The labour-intensive textile sector will benefit from an Integrated Programme with five components:
The government announced development of seven High-Speed Rail corridors connecting major cities: Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri. These corridors will function as growth connectors for sustainable passenger transport.
Additionally, the Budget proposes:
Part B: Fulfilling Aspirations and Building Capacity
Part B of the Budget 2026-27 focuses on fulfilling aspirations and building capacity by investing in education, skill development, healthcare, sports, and technology-driven solutions, ensuring that citizens are empowered to actively participate in India’s growth story.
Part C: Fiscal Prudence and Consolidation
Part C of the Budget 2026-27 underscores fiscal prudence and consolidation, aiming to manage debt efficiently, reduce fiscal deficit, and free resources for priority sector expenditure while maintaining macroeconomic stability.
Direct Tax Reforms: Simplification and Rationalisation
The Budget 2026-27 proposes significant direct tax reforms aimed at simplifying compliance, rationalising penalties, and supporting cooperatives, making the tax system more transparent and taxpayer-friendly.
IT Sector Incentives
The Budget 2026-27 introduces key measures to boost the IT sector and attract global investment, aiming to simplify compliance, encourage innovation, and strengthen India’s position as a preferred destination for technology and talent.
Indirect Taxes and Customs Reforms
The Union Budget 2026-27 introduces key reforms in indirect taxes and customs to simplify the tariff structure, support domestic manufacturing, and enhance ease of doing business.
Customs duty exemptions extended for lithium-ion cells, critical minerals, solar glass, nuclear projects, and aircraft components. Duty-free import limits for inputs in marine, leather, and textiles exports raised. Tariff on goods for personal use reduced from 20% to 10%, with 17 medicines exempted.
Customs warehousing restructured into an operator-centric system with self-declarations and risk-based audits. Cargo clearance approvals to be processed through a single digital window by the end of FY2026-27.
Duty-free allowances and courier exports revised to benefit small businesses, artisans, and e-commerce startups. Non-intrusive scanning and AI-based risk assessment to be expanded across all major ports.
Conclusion
The Union Budget 2026-27 presents a visionary approach that balances economic ambition with social inclusion. With initiatives spanning MSMEs, Biopharma, textiles, infrastructure, education, healthcare, sports, and AI-based agriculture, the government aims to achieve a Viksit Bharat. Simultaneously, tax simplification, customs reforms, and global investment incentives strengthen India’s competitiveness, ensuring that growth is sustainable, inclusive, and globally integrated.
By focusing on youth empowerment, digital innovation, skill development, and sectoral reforms, the Budget aims to create an ecosystem where every citizen can participate meaningfully in India’s development journey, positioning the country as a global economic powerhouse by 2030.
