Union Budget 2026: FM Sitharaman Announces Big Plans For Viksit Bharat; Key Highlights Of Budget FY27

Finance Minister Nirmala Sitharaman has declared the Union Budget 2026 on February 1. For the fiscal year 2026-27, FM announced big plans to ensure sustained economic growth. In her opening remark, Sitharaman said, India must become deeply integrated with global markets, exporting more and attracting stable, long-term investment.

She added, "India will continue to take steps towards Viksit Bharat, balancing ambition with inclusion as a growing economy with expanding trade and capital needs."

Among the major announces, FM introduced Biopharma SHAKTI scheme with an outlay of Rs 10,000 crore. This comes a big boost to pharmaceutical sector.

To scale up manufacturing in strategic and frontier sectors, the Union Finance Minister launched key initiatives such as:

- Biopharma SHAKTI

- India Semiconductor Mission (ISM) 2.0

- Electronics Components Manufacturing Scheme

- Dedicated Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu

- 3 dedicated Chemical Parks

- Scheme to revive 200 legacy industrial clusters

Key Highlights Of Union Budget 2026:

The Budget 2026 was focused on 3 Kartavyas:

First Kartavya is to accelerate and sustain economic growth and proposes 6 interventions. Key Highlights here are:

- Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation) announced, with an outlay of ₹ 10,000 crores over the next 5 years to develop India as a global Biopharma manufacturing hub.

- A Biopharma-focused network to be created with 3 new National Institutes of Pharmaceutical Education and Research (NIPER) and upgrading 7 existing ones.

- India Semiconductor Mission (ISM) 2.0 to be launched to produce equipment and materials, design full-stack Indian IP, and fortify supply chains with focus on industry led research and training centres to develop technology and skilled workforce.

- The Electronics Components Manufacturing Scheme outlay increased to ₹40,000 crore.

- Dedicated Rare Earth Corridors to be established, to support the mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to promote mining, processing, research and manufacturing.

- Government to launch a Scheme to support States in establishing 3 dedicated Chemical Parks, through challenge route, on a cluster-based plug-and-play model.

- Hi-Tech Tool Rooms to be established by CPSEs at 2 locations as digitally enabled automated service bureaus that locally design, test, and manufacture high-precision components at scale and at lower cost.

- A Scheme for Enhancement of Construction and Infrastructure Equipment (CIE) to be introduced, to strengthen domestic manufacturing of high-value and technologically-advanced CIE.

- A Scheme for Container Manufacturing announced, to create a globally competitive container manufacturing ecosystem, with a budgetary allocation of over Rs 10,000 crore over a 5 year period.

- The National Fibre Scheme for self-reliance in natural fibres such as silk, wool and jute, man-made fibres, and new-age fibres.

- Mega Textile Parks to be setup in challenge mode with focus on bringing value addition to technical textiles.

- A dedicated Rs 10,000 crore SME Growth Fund, to be introduced, to create future Champions, incentivizing enterprises based on select criteria.

- Public capital expenditure to be increased to Rs 12.2 lakh crore in FY 2026-27.

- Government to accelerate recycling of significant real estate assets of CPSEs through the setting up of dedicated REITs.

- Government to restructure the Power Finance Corporation and Rural Electrification Corporation to achieve scale and improve efficiency in the Public Sector NBFCs.

- An incentive of Rs 100 crore for a single bond issuance of more than Rs 1000 crore announced, to encourage the issuance of municipal bonds of higher value by large cities.

Second Kartavya is to fulfil aspirations and build capacity of people. Key Highlights Here Are:

- Government to set up a High-Powered 'Education to Employment and Enterprise' Standing Committee to recommend measures that focus on the Services Sector as a core driver of Viksit Bharat.

- Existing institutions for Allied Health Professionals (AHPs) to be upgraded and new AHP Institutions to be established in private and Government sectors. Also, 100,000 Allied Health Professionals to be added over the next 5 years.

- 3 new All India Institutes of Ayurveda to be established

- A loan-linked capital subsidy support scheme to be launched for establishment of veterinary and para vet colleges, veterinary hospitals, diagnostic laboratories and breeding facilities in the private sector.

- 5 University Townships to be created in the vicinity of major industrial and logistic corridors through challenge route.

- National Council for Hotel Management and Catering Technology to be upgraded to National Institute of Hospitality

- Khelo India Mission to be launched to transform the Sports sector over the next decade.

Third Kartavya is aligned with vision of Sabka Sath, Sabka Vikas and requires targeted efforts in the following four areas:

1. Increasing Farmer Incomes: New Initiatives to be undertaken, while integrated development of 500 reservoirs and Amrit Sarovars.

2. Government to support high value crops such as: coconut, sandalwood, cocoa and cashew in coastal areas. Notably, Coconut Promotion Scheme to be launched to increase production and enhance productivity.

3. Government to launch Bharat-VISTAAR, a multilingual AI tool to integrate the AgriStack portals and the ICAR package on agricultural practices with AI systems.

4. Divyangjan Kaushal Yojana for Divyangjans to offer task-oriented and process-driven roles in IT, AVGC sectors, Hospitality and Food and Beverages sectors.

5. Government to develop an integrated East Coast Industrial Corridor with a well-connected node at Durgapur, creation of 5 tourism destinations in the 5 Purvodaya States, and the provision of 4,000 e-buses.

6. Government provided Rs 1.4 lakh crore to the States for the FY 2026-27 as Finance Commission Grants as recommended by the 16th Finance Commission.

Furthermore, Finance Minister announced key incentives and tax changes under direct taxes. These include:

- New Income tax Act ,2025 to come into effect from April 2026.

- The simplified Income Tax Rules and Forms will be notified shortly. The forms redesigned for easy compliance of ordinary citizens.

- Interest awarded by the Motor Accident Claims Tribunal to a natural person will be exempt from Income Tax, and any TDS on this account will be done away with.

- Reduce TCS rate on sale of overseas tour program package to 2 % (from current 2-20%).

- Reduce the TCS rate to 2% (from current 5%) for LRS remittances for education and medical.

- Simplified TDS provisions for manpower supply will benefit labour intensive business.

- Extend time available for revising returns from 31st December to upto 31st March with payment of nominal fees. The timeline for filing of tax returns to be staggered.

- TAN for property transactions involving NRIs will be replaced with resident buyers PAN based challan.

- A one time 6 month foreign asset disclosure scheme for small taxpayers to disclose their overseas income or asset.