Union Budget 2026–27: A New Momentum of Growth, Capacity and Inclusive Development

 

Union Budget 2026–27: A New Momentum of Growth, Capacity and Inclusive Development

AI + Skills + Women + Health + Infrastructure + Inclusion = India’s New Progress

            The Union Budget for FY 2026–27 emerges as a concrete step towards transforming India into a developed, technologically empowered, and self-reliant nation. Rather than focusing on short-term relief, the budget lays the foundation for long-term, inclusive, and sustainable growth. Multidimensional investments across agriculture, rural economy, youth, skill development, MSMEs, health, women empowerment, industrial investment, and strategic sectors define its core vision. An increase of ₹1 lakh crore in capital expenditure clearly signals the government’s growth-oriented and investment-driven approach.



Farmers and Rural Economy: The Foundation of Self-Reliance

The budget places agriculture and the rural sector at the heart of development. Through the One District–One Product (ODOP) initiative, local products are being integrated with training, production, and market access. Special emphasis on high-value horticulture and forestry crops such as coconut, cashew, cocoa, almonds, walnuts, and sandalwood will diversify and strengthen rural incomes. The AI-enabled Bharat-VISTAAR tool will assist farmers in crop selection, irrigation planning, and market decisions. Reservoir development, along with loan-linked subsidies for animal husbandry and fisheries, is expected to significantly boost rural employment and livelihoods.

Salaried and Middle Class: Stability with Long-Term Relief

By maintaining the existing income tax slabs, the government has ensured stability in the tax regime. Extending the deadline for filing revised returns to 31 March offers administrative ease to taxpayers. The reduction of TCS from 5% to 2% on education, medical treatment, and overseas travel provides direct relief to the middle class. Expected reductions in prices of mobile phones, electric vehicles, and solar products will encourage the green economy, while the increase in STT reflects a policy intent to curb excessive speculation in capital markets.

Youth and Skill Development: Preparing for the Future Economy

Recognizing youth as the backbone of India’s future economy, the budget prioritizes AI, Digital Knowledge Grid, AVGC, gaming, and design institutions. The proposal to establish Content Creator Labs in schools and colleges positions India firmly within the global creative economy.
Long-term investment in human capital is evident through the training of healthcare specialists and caregivers. Tourism-based skill programs and the construction of hostels for girls further strengthen social inclusion and employment opportunities.

Empowering Students and Transforming the Education Ecosystem

            The Union Budget 2026 places students and the education sector at the core of India’s future-ready growth strategy. With a record allocation of ₹1.39 lakh crore for education (an 8.2% increase), the budget focuses on improving learning quality, research capacity, and employability. The creation of five university townships will strengthen linkages between education, research, and industry, while creator labs in 15,000 schools and 500 colleges aim to equip students for the digital and creator economy. The addition of 75,000 medical seats over five years expands opportunities in healthcare education, and girls’ hostels in every district will enhance access and retention of female students. Further, a ₹500 crore AI Centre of Excellence, national skilling centres, a new design institute, and dedicated innovation funding signal a decisive shift from degree-oriented education to skill-based, innovation-driven learning, aligning human capital development with the needs of a rapidly evolving economy.

Corporate and Industrial Sector: Strategic Self-Reliance

Large-scale investments in defence, semiconductors, bio-pharma, and electronics underline the budget’s focus on strategic self-reliance. High-speed rail corridors and cargo freight networks will reduce logistics costs and enhance industrial competitiveness. The Infrastructure Risk Guarantee Fund is expected to attract private investment, while Semiconductor Mission 2.0 will boost domestic manufacturing and export potential.

 

MSMEs, Trade and Handicrafts: From Local to Global

Enhanced access to capital and markets through the MSME Growth Fund and increased government procurement will strengthen small enterprises. Targeted schemes for textiles, handloom, and handicrafts aim to integrate traditional skills with modern markets.
The Natural Yarn Scheme and National Handloom Policy will reinforce rural and artisan-based economies.



Women Empowerment and Social Welfare

Initiatives such as SHE-Mart reflect a shift from welfare to entrepreneurship for women. The construction of girls’ hostels in all 789 districts and special emphasis on STEM education further reinforce a women-centric development framework.

 

Health, Elderly and Divyangjan: Holistic Human Development

Removal of customs duty on medicines for cancer and rare diseases has made advanced healthcare more accessible. Proposals such as NIMHANS 2.0, expansion of Ayurveda institutions, ₹10,000 crore investment in bio-pharma, and training of one lakh healthcare professionals highlight a comprehensive health policy. Establishment of trauma centres in district hospitals and targeted schemes for persons with disabilities strengthen the objective of social justice.

Capital Expenditure, Tax Policy and Fiscal Stability

Raising capital expenditure to ₹12.2 lakh crore will accelerate growth in infrastructure, manufacturing, and industrial clusters. The fiscal deficit target of 4.3% and a debt-GDP ratio of 55.6% reflect fiscal discipline. The new Income Tax Act, effective from 1 April 2026, with simplified and redesigned forms, signals a citizen-friendly tax administration.

Digital and New Economy

Record growth in UPI transactions underscores the strength of India’s digital economy. The formation of a high-level committee for banking reforms marks another significant step towards Viksit Bharat.

Overall Assessment

            Union Budget 2026–27 sets a clear course toward a productive, inclusive, and future-ready economy. Strategic investments in AI, skill development, women empowerment, healthcare, and infrastructure are expected to enhance human capital quality, accelerate employment generation, and crowd in private investment. By integrating agriculture, the rural economy, and MSMEs with technology and finance, the budget strengthens local-to-global competitiveness, while a significant rise in capital expenditure boosts logistics, manufacturing, and industrial clusters. A balanced emphasis on fiscal discipline, digital expansion, and social security supports sustainable growth. Overall, the budget has the potential to advance economic stability, social equity, and technological leadership, reinforcing India’s pathway toward Viksit Bharat.

 

Dr. Dinesh KumarGupta
Head, Department of Economics
Assistant Professor, Economics
Rajkiya Mahavidyalaya Amori (Champawat)

(Department of Higher Education Uttarakhand)

 

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