The Union Budget 2026, presented on February 1, 2026, has been hailed by Prime Minister Narendra Modi as a "historic budget" that lays the road map for "Viksit Bharat". The budget emphasizes economic growth, citizen empowerment, and inclusive development, setting the stage for India's journey towards becoming a developed nation by 2047.

Key Highlights and Priorities

The budget is structured around three core "kartavyas" or duties: accelerating sustainable economic growth, fulfilling citizens' aspirations while achieving self-reliance ("Atmanirbharta"), and ensuring equitable access to resources across all communities and regions.

• Infrastructure Development: A significant highlight is the record capital expenditure of ₹12.2 lakh crore, направлена principalement sur les routes, les chemins de fer, les projets de métro, les ports, la logistique et l'infrastructure urbaine. This investment aims to boost job creation, improve connectivity, and strengthen India's long-term growth potential. The government also announced plans to develop seven new high-speed rail corridors to improve connectivity between major cities.

• MSME Support: Recognizing the vital role of Micro, Small, and Medium Enterprises (MSMEs), the budget includes a ₹10,000 crore SME Growth Fund to support expansion and innovation, as well as ₹2,000 crore for liquidity support targeted at micro-enterprises. Strengthening of the TReDS platform aims to ensure faster invoice payments, easing credit access and improving cash flows for small businesses.

• Focus on High-Potential Sectors: The budget prioritizes sectors like biopharma, rare earth and critical minerals, and textiles. The launch of the Biopharma Shakti initiative with a ₹10,000 crore outlay aims to position India as a global hub for pharmaceutical manufacturing and innovation. Dedicated rare-earth corridors in Tamil Nadu, Kerala, Odisha, and Andhra Pradesh will support the mining, processing, research, and manufacturing of strategic and critical minerals.

• Technology and Innovation: The government will roll out India Semiconductor Mission 2.0, focusing on industry-driven research, advanced technology development, and training centers to build strong semiconductor capabilities and a skilled workforce. The budget also underscores that India's growth will be technology-driven, prioritizing AI, emerging technologies, and R&D.

• Green Energy and Sustainability: Viksit Bharat is committed to achieving net-zero carbon emissions and promoting sustainable and green growth across all sectors. The operationalization of 20 additional national waterways over the next five years aims to promote eco-friendly and cost-effective cargo transport.

• Agriculture and Rural Economy: The budget includes measures to improve farmer incomes through high-value crops such as coconut, cashew, walnut, almond, and pine nut. The Mahatma Gandhi Gram Swaraj Initiative will boost the Khadi, handloom, and handicraft sectors by connecting these products to global markets and providing branding and marketing support. The budget for rural employment schemes saw a 43% hike, with allocation of ₹95,692.31 crore to the new rural employment scheme under the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) Act, 2025.

Fiscal Management and Projections

The government proposes to reduce the debt-to-GDP ratio to 55.6% in FY26–27, from 56.11% in FY25–26. The fiscal deficit is estimated at 4.4% for FY25–26 and projected to decline further to 4.3% in FY26–27. To finance the deficit, the government plans to borrow ₹11.7 lakh crore in FY26–27 through dated securities.

Reactions and Analysis

The budget has received mixed reactions. Prime Minister Modi has hailed it as a step towards Viksit Bharat, while some opposition leaders have criticized its blind spots. Corporate leaders have generally praised the budget's focus on infrastructure, manufacturing, and MSME support, seeing long-term growth potential. Market experts have warned of potential volatility, highlighting concerns such as STT hikes and foreign investor caution. Industry leaders have characterized the budget as a "definitive statement of intent," emphasizing the government's commitment to infrastructure-led growth and sustainable development.

The Path to Viksit Bharat

The Union Budget 2026 is aligned with the vision of transforming India into a developed nation by 2047, characterized by economic prosperity, social advancement, environmental sustainability, and effective governance. Achieving this vision requires a collaborative and inclusive approach, with a focus on engaging various stakeholders and fostering youth engagement. A central tenet is the ambitious target of transforming India into a USD 30-40 trillion economy by 2047, elevating the per capita income to between USD 15,000 and USD 18,000. This necessitates a sustained high annual GDP growth rate over the next two decades.