The document titled “Key Features of Budget 2026–2027” outlines the Government’s economic vision and policy priorities for the financial year 2026–27, with a stated focus on transforming ambition into achievement through sustained growth, fiscal discipline, and people-centric development
The Budget is framed around the theme of action over ambivalence, reform over rhetoric, and people over populism, aligning with the broader vision of Viksit Bharat while balancing growth with inclusion.
At the macro level, the Budget emphasises moderate inflation, monetary stability, fiscal prudence, and a high growth trajectory of around 7%. It highlights reduced critical import dependencies, strong public investment, domestic manufacturing capacity, and energy security as core pillars supporting economic stability. Over 350 structural reforms already undertaken—such as GST simplification, labour code notification, and deregulation—are presented as part of a continuous, adaptive reform process.
Manufacturing receives significant attention, particularly in strategic and frontier sectors. The Budget proposes schemes to revive 200 legacy industrial clusters, strengthen high-value and technologically advanced manufacturing, and support sectors such as biopharma, electronics components, textiles, chemicals, container manufacturing, semiconductors, rare earth magnets, affordable sports goods, and hi-tech tool rooms. Multiple customs and tax measures are proposed to boost manufacturing, including exemptions from basic customs duty on specified parts and raw materials, deferred duty payment windows for trusted manufacturers, duty-free import enhancements for exporters, and tax incentives for non-residents supplying capital goods in bonded zones.
MSMEs are supported through a three-pronged approach focusing on equity support, liquidity through the TReDS platform, and professional support. Measures include a ₹10,000 crore SME Growth Fund, additional allocation to the Self-Reliant India Fund, mandatory use of TReDS by CPSEs for MSME purchases, credit guarantee support for invoice discounting, linkage of GeM with TReDS, and development of a secondary market for TReDS receivables. The Budget also proposes professional institutional support through “Corporate Mitras” to assist MSMEs with compliance.
The services sector is positioned as a core driver of growth, with initiatives in medical value tourism, allied health education, caregiving, AYUSH institutions, AVGC content creation, design, sports, and IT services. Tax reforms for services include expanded safe harbour thresholds for IT services, automated approval processes, extended validity of safe harbour, faster APA timelines, and long-term tax holidays for foreign companies providing cloud services through India-based data centres.
Agriculture and allied sectors are addressed through targeted programmes in fisheries, horticulture, animal husbandry, cashew, cocoa, coconut, sandalwood, and high-value agriculture. Measures focus on productivity enhancement, post-harvest processing, rural entrepreneurship, and technology integration through AI-enabled platforms.
Infrastructure and energy security form another major pillar, with proposals for new freight corridors, national waterways, coastal shipping promotion, infrastructure risk guarantees, REITs for CPSE assets, and large-scale public capex support. Energy-related measures include customs duty exemptions for clean energy inputs, nuclear power projects, battery storage systems, and critical mineral processing.
The Budget also advances trust-based governance and ease of doing business through customs reforms, extended advance ruling validity, automated notifications, warehouse-centric systems, and digital cargo clearance. Personal tax and compliance measures aim to simplify TDS/TCS, decriminalise certain defaults, extend timelines for return revision, provide immunity frameworks, and rationalise MAT and buyback taxation.
On fiscal matters, the Budget retains the vertical devolution share to states at 41%, provides substantial Finance Commission grants, and continues the fiscal consolidation path with a targeted fiscal deficit of 4.3% of GDP for 2026–27. Overall, the Budget presents a comprehensive framework focused on growth, reform, inclusion, and long-term economic resilience.
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