In a landmark move aimed at bolstering India's economic growth and infrastructure, the Union Budget 2026, presented on February 1, 2026, has unveiled a series of ambitious initiatives. The budget lays emphasis on modernizing transportation, fostering economic hubs, and empowering small and medium-sized enterprises (SMEs) with a substantial financial boost.
A key highlight of the budget is the focus on developing high-speed rail corridors to improve connectivity and promote environmentally sustainable passenger systems. Finance Minister Nirmala Sitharaman proposed the development of seven high-speed rail corridors connecting major cities. The corridors include Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri. These corridors are expected to reduce travel times, facilitate faster and cleaner mobility, and support economic expansion across the country.
Recognizing the crucial role of SMEs in driving economic growth and generating employment, the budget announced the establishment of a ₹10,000 crore SME Growth Fund. This fund aims to support job-creating enterprises and nurture future champions in the MSME sector. Complementing this initiative, the Self-Reliant India Fund will receive an additional ₹2,000 crore to provide micro-enterprises with access to risk capital. The government will also encourage professional institutions to design short-term courses to develop "Corporate Mitras", especially in Tier-II and Tier-III towns. Furthermore, the budget includes measures to strengthen liquidity for SMEs, such as mandatory use of TReDS for CPSE purchases, credit guarantees for invoice discounting, and the integration of GeM and TReDS.
The Union Budget 2026 also prioritizes the development of City Economic Regions (CERs) to promote economic activity and regional development. An allocation of ₹5,000 crore over five years has been announced for CERs, which will be implemented through a challenge mode with reform-cum-results based financing. These regions are envisioned as integrated economic zones that foster innovation, attract investment, and create employment opportunities. The government will continue to focus on infrastructure development in cities with over 5 lakh population, that is, tier 2 and tier 3 cities, which have expanded to become growth centers.
In addition to these key initiatives, the budget includes provisions for promoting container manufacturing, establishing mega textile parks, and supporting mineral-rich states. A new scheme with an outlay of ₹10,000 crore will promote container manufacturing, while mega textile parks will be set up in challenge mode. The budget also proposes to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu in establishing dedicated rare earth corridors.
The Union Budget 2026 demonstrates the government's commitment to investing in infrastructure, empowering SMEs, and promoting balanced regional development. With a significant increase in capital expenditure to ₹12.2 lakh crore for FY27, the budget aims to sustain economic growth and create a prosperous future for India.