BUDGET 2026–27 : DETAILED ASSIGNMENT

INTRODUCTION
• The Union Budget 2026–27 has been presented at a crucial stage of India’s development journey
with the long-term vision of achieving Viksit Bharat by 2047. It aims to transform India into a
developed, inclusive and resilient economy.
• The Budget places emphasis on action over rhetoric, reform over short-term populism, and
people-centric governance, ensuring that economic growth is both sustainable and inclusive.
• It focuses on maintaining moderate inflation, achieving a high growth rate of around 7%,
ensuring fiscal discipline, and maintaining overall macroeconomic stability.
• Special attention has been given to Yuva Shakti (youth power), expansion of domestic
manufacturing, reduction of import dependence, strengthening energy security and improving ease
of living for citizens.

BODY

1. Vision, Reform Orientation and Growth Philosophy

• The guiding principle (Sankalp) of the Budget is to accelerate economic growth while fulfilling the
aspirations of citizens, especially the poor, underprivileged and disadvantaged sections of society.
• The Budget follows the vision of Sabka Saath, Sabka Vikas, ensuring that development reaches
every family, region, community and sector.
• Three major Kartavyas (duties) have been identified:
• Enhancing productivity and competitiveness across agriculture, manufacturing and services.
• Building economic resilience against global uncertainties such as geopolitical tensions and supply
chain disruptions.
• Strengthening people’s capacities through skill development, employment generation and access to
resources.
• Structural reforms are described as continuous, adaptive and forward-looking, indicating long-
term commitment.
• Emphasis is placed on a robust and resilient financial sector to mobilise savings, allocate capital
efficiently and manage risks.
• Adoption of Artificial Intelligence (AI) and advanced technologies is encouraged to improve
governance and service delivery.
• Over 350 economic reforms have been implemented, including Goods and Services Tax (GST)
simplification, notification of Labour Codes, and rationalisation of Quality Control Orders.
• The Central Government is working closely with State Governments to reduce compliance burden
and improve the ease of doing business.

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2. Sustaining Economic Growth

2.1 Manufacturing and Strategic & Frontier Sectors

• Strong emphasis is placed on domestic manufacturing, particularly in high-value and technology-

intensive sectors, to strengthen self-reliance.
• A scheme to revive 200 legacy industrial clusters aims to modernise traditional industrial hubs and
create large-scale employment.
• Focus on strengthening domestic manufacturing of construction and infrastructure equipment to
support large public investments.
• Major initiatives include:
• Biopharma SHAKTI for pharmaceutical innovation and production.
• Electronics Components Manufacturing Scheme to strengthen electronics supply chains.
• Integrated Programme for Textiles to improve competitiveness and exports.
• Establishment of three Chemical Parks to boost domestic chemical production.
• Container Manufacturing Scheme to support logistics and trade.
• India Semiconductor Mission (ISM) 2.0 to develop a domestic semiconductor ecosystem.
• Manufacturing of Rare Earth Permanent Magnets, critical for clean energy and electronics.
• Promotion of affordable sports goods manufacturing.
• Establishment of Hi-Tech Tool Rooms in Central Public Sector Enterprises (CPSEs).

2.2 Tax and Customs Reforms for Manufacturing

• Five-year income tax exemption is provided to non-residents supplying capital goods to toll
manufacturers in bonded zones.
• Safe harbour provisions are introduced for non-resident component warehousing to reduce tax
disputes.
• Trusted manufacturers are allowed deferred duty payment, improving liquidity and ease of
operations.
• Duty-free import limits for seafood export inputs are increased from 1% to 3% of export turnover.
• Duty-free imports extended to shoe uppers and export of footwear products.
• Export timelines for leather and textile products are extended from 6 months to 1 year.
• Exemptions from Basic Customs Duty (BCD) on:
• Microwave oven parts
• Aircraft manufacturing components
• Raw materials for aircraft Maintenance, Repair and Overhaul (MRO)
• Electronic sealing and factory-to-port clearance reduce logistics delays.
• One-time concessional domestic sale is allowed for eligible Special Economic Zone (SEZ) units.

3. MSME Development Strategy

• Micro, Small and Medium Enterprises (MSMEs) are recognised as engines of employment and
inclusive growth.
• Equity Support:

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 • ₹10,000 crore SME Growth Fund.
• ₹2,000 crore additional support to the Self-Reliant India Fund.
• Liquidity Support through Trade Receivables Discounting System (TReDS):
• Mandatory use of TReDS by CPSEs for MSME purchases.
• Credit guarantee through Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE).
• Linking Government e-Marketplace (GeM) with TReDS.
• Development of secondary markets for receivables.
• Professional Support through ‘Corporate Mitras’ in Tier-II and Tier-III towns.
• Removal of the ₹10 lakh cap on courier exports to boost small exporters.

4. Renewed Focus on the Services Sector

Health, Care Economy and AYUSH

• Establishment of five Medical Value Tourism hubs with State and private sector participation.
• New and upgraded institutions for Allied Health Professionals (AHPs).
• Training of 1.5 lakh multi-skilled caregivers.
• Expansion of AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy)
institutions.
• Strengthening the World Health Organization (WHO) Global Traditional Medicine Centre.

Creative Economy, Sports and Design

• Animation, Visual Effects, Gaming and Comics (AVGC) content creator labs in schools and
colleges.
• New National Institute of Design (NID) in eastern India.
• Khelo India Mission for integrated sports talent development.

Education and Tourism

• Five university townships near industrial corridors.

• Girls’ hostels in Science, Technology, Engineering and Mathematics (STEM) institutions.
• National Destination Digital Knowledge Grid for heritage sites.
• Development of eco-tourism and archaeological destinations.
• Hosting the Global Big Cat Summit.
• Establishment of a National Institute of Hospitality.

Tax Reforms for Services

• Unified Information Technology (IT) services category with a safe harbour margin of 15.5%.
• Safe harbour threshold increased to ₹2,000 crore.
• Tax holidays till 2047 for foreign cloud service providers using India-based data centres.
• Development of Buddhist tourism circuits in the North-East.
• Tax exemption for non-resident experts for five years.

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5. Financial Sector Reforms
• Incentives for large municipal bond issuances.
• Restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).
• Comprehensive review of Foreign Exchange Management Act (FEMA) rules.
• Introduction of market-making framework and total return swaps in corporate bonds.
• Formation of a High-Level Committee on Banking for Viksit Bharat.
• Increase in Securities Transaction Tax (STT) on futures and options.

6. Agriculture and Allied Sector Development

• Objective of increasing farmers’ income through productivity and diversification.
• Strengthening fisheries through reservoirs and Amrit Sarovars.
• Dedicated programmes for coconut, cashew, cocoa and sandalwood.
• Support for animal husbandry infrastructure and veterinary institutions.
• Integration of AgriStack and Indian Council of Agricultural Research (ICAR) systems with AI.
• Rejuvenation of orchards and promotion of high-density cultivation.

7. Infrastructure, Energy and Urban Development

• Establishment of an Infrastructure Risk Guarantee Fund.
• Monetisation of CPSE real estate through Real Estate Investment Trusts (REITs).
• New Dedicated Freight Corridors and inland waterways.
• Coastal cargo promotion and seaplane viability gap funding schemes.
• Carbon Capture, Utilisation and Storage (CCUS) scheme.
• Customs duty exemptions for lithium-ion batteries, solar glass, nuclear and critical minerals.
• Promotion of biogas-blended Compressed Natural Gas (CNG).

8. People-Centric Development
• Strengthening geriatric and mental healthcare systems.
• Self-Help Entrepreneur (SHE) Marts for women-led enterprises.
• Divyangjan Kaushal Yojana and Divyang Sahara Yojana.
• Expansion of Artificial Limbs Manufacturing Corporation of India (ALIMCO).
• Establishment of trauma care centres in district hospitals.
• Setting up of NIMHANS-2 and upgradation of mental health institutes.

9. Trust-Based Governance and Ease of Living

• Enhanced duty deferral for Authorised Economic Operators (AEOs).
• Extension of advance ruling validity from 3 to 5 years.

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 • Simplified customs warehousing framework.
• Reduction in Tax Collected at Source (TCS) and Tax Deducted at Source (TDS) rates.
• Decriminalisation of minor tax defaults.
• One-time foreign asset disclosure scheme for small taxpayers.
• Single digital window for cargo clearance.

CONCLUSION
• The Union Budget 2026–27 presents a balanced, reform-oriented and inclusive development
strategy.
• By combining fiscal prudence with strong public investment, it strengthens India’s economic
foundations.
• The Budget aims to transform aspirations into achievements and guide India steadily towards the
goal of Viksit Bharat.

LIST OF ABBREVIATIONS
• AI – Artificial Intelligence
• AEO – Authorised Economic Operator
• AHP – Allied Health Professional
• ALIMCO – Artificial Limbs Manufacturing Corporation of India
• AVGC – Animation, Visual Effects, Gaming and Comics
• AYUSH – Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy
• BCD – Basic Customs Duty
• CCUS – Carbon Capture, Utilisation and Storage
• CGTMSE – Credit Guarantee Fund Trust for Micro and Small Enterprises
• CPSE – Central Public Sector Enterprise
• FEMA – Foreign Exchange Management Act
• GeM – Government e-Marketplace
• GST – Goods and Services Tax
• ICAR – Indian Council of Agricultural Research
• ISM – India Semiconductor Mission
• IT – Information Technology
• MSME – Micro, Small and Medium Enterprises
• NID – National Institute of Design
• NIMHANS – National Institute of Mental Health and Neurosciences
• PFC – Power Finance Corporation
• REC – Rural Electrification Corporation
• REIT – Real Estate Investment Trust
• SEZ – Special Economic Zone
• SHE – Self-Help Entrepreneur
• STEM – Science, Technology, Engineering and Mathematics
• STT – Securities Transaction Tax

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• TCS – Tax Collected at Source
• TDS – Tax Deducted at Source
• TReDS – Trade Receivables Discounting System
• UT – Union Territory
• WHO – World Health Organization