Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2026-27, outlining a comprehensive roadmap for India's economic growth with significant emphasis on infrastructure development, manufacturing enhancement, and sectoral reforms. The budget introduces multiple strategic initiatives aimed at boosting domestic production, improving logistics, and creating employment opportunities across various sectors.
Infrastructure and Logistics Boost
The budget places strong focus on transforming India's transportation and logistics network. A major announcement includes the establishment of new dedicated freight corridors that will connect Dankuni in the eastern region to Surat in the western part of the country. This ambitious project is expected to significantly reduce transit times and costs for freight movement.
Additionally, the government plans to operationalize twenty new national waterways that will link mineral-rich areas with industrial centers and major ports. This initiative is complemented by the launch of a Coastal Cargo Promotion Scheme, which aims to increase the share of inland waterways and coastal shipping from the current six percent to twelve percent by the year 2047.
Manufacturing and Industrial Development
To strengthen India's manufacturing capabilities, the budget announces several key measures. Three dedicated chemical parks will be established to enhance domestic production capacity in this critical sector. The government also introduces a scheme focused on rare earth permanent magnets, covering research, mining, processing, and manufacturing activities.
Furthermore, the budget includes provisions for strengthening the manufacturing of high-value and technologically advanced construction equipment. The Tex-eco initiative will promote globally competitive and sustainable textiles and apparels, while the Purvodaya program will develop an Integrated East Coast Industrial Corridor.
Financial Sector Reforms
The budget introduces significant reforms in the financial sector, including a comprehensive review of the Foreign Exchange Management (FEMA) (Nondebt Instruments) Rules. A market-making framework and total return swaps on corporate bonds will be introduced to deepen the bond market.
In a move to attract foreign investment, the budget offers a tax holiday until 2047 for foreign companies providing services to any part of the world from India. Safe harbour provisions are extended to non-residents for component warehousing in bonded warehouses.
Healthcare and Education Initiatives
The healthcare sector receives substantial attention with schemes to support states in establishing five hubs for medical value tourism in partnership with the private sector. Three new All India Institutes of Ayurveda will be established, along with upgrades to AYUSH pharmacies and drug testing laboratories.
For education and skill development, a high-powered 'education to employment and enterprise' standing committee will focus on the services sector. The government plans to upgrade and establish new institutions for allied health professionals in ten select disciplines.
Agricultural and Rural Development
Agricultural initiatives include the rejuvenation of old low-yielding orchards and expansion of high-density cultivation of walnuts, almonds, and pine nuts. The budget introduces loan-linked capital subsidy support for establishing veterinary hospitals and diagnostic laboratories.
A coconut promotion scheme aims to increase production and enhance productivity, while dedicated programs will support the Indian cashew and cocoa industries. The fisheries value chain in coastal areas will be strengthened as part of broader rural development efforts.
Urban Development and Energy
Urban development receives focus through the continuation of the current scheme under AMRUT and an incentive of Rs 100 crore for single issuance of municipal bonds exceeding Rs 1,000 crore. The budget also announces the restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).
Additionally, the government plans integrated development of 500 reservoirs and Amrit Sarovars, while a high-level committee on banking for Viksit Bharat will align financial systems with India's next growth phase.
