In the face of global economic uncertainties, Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27, emphasizing the Indian economy's strong fundamentals and its alignment with the long-term vision of "Viksit Bharat 2047". Sitharaman, in her ninth consecutive budget presentation, underscored the country's resilience and stability, highlighting its ability to navigate global headwinds and maintain a high-growth trajectory.

Economic Growth and Fiscal Prudence

The Finance Minister projected a GDP growth between 6.8% and 7.2% for the upcoming fiscal year, reaffirming India's position as the fastest-growing major economy. The budget demonstrates a commitment to fiscal consolidation, with the debt-to-GDP ratio expected to fall to 55.6% in the next financial year from 56.1% in 2025-26. The fiscal deficit is also projected to decrease to 4.3% of GDP in FY27, down from 4.4% in the current fiscal year. The nominal GDP is assumed to grow by 10% to Rs 393 lakh crore.

To maintain growth momentum, the budget focuses on structural reforms to enhance productivity, competitiveness, and long-term stability. Capital expenditure has been increased by 9% to ₹12.2 lakh crore, with emphasis on railways, small businesses, and the health sector. The government aims to increase capital expenditure to Rs 12.2 lakh crore for FY27, a rise from Rs 11.2 lakh crore. Net tax receipts are estimated at Rs 28.7 lakh crore, and the total budget size is pegged at Rs 53.5 lakh crore.

Key Priorities and Initiatives

The budget is structured around three key "Kartavyas" or responsibilities:

• Accelerating and sustaining economic growth by enhancing competitiveness.
• Empowering citizens through skills and participation.
• Ensuring equitable access to resources and opportunities for all families, communities, and regions.

Several initiatives have been proposed to achieve these goals. To strengthen the MSME sector, the budget includes the launch of a ₹10,000 crore SME Growth Fund and enhanced allocation to the Self-Reliant India Fund. It also mandates CPSE onboarding on TREDS, credit guarantees for invoice discounting, GeM-TREDS integration, and the introduction of Asset-Backed Securities (ABS) for a secondary market.

With the aim to improve logistics and connectivity, the budget proposes to develop seven High-Speed Rail corridors between major cities. Furthermore, to promote tourism, incentives will be given to indigenize the manufacturing of seaplanes, and a Seaplane VGF Scheme will be introduced to support operations.

Viksit Bharat 2047

The budget is strategically aligned with the vision of "Viksit Bharat 2047", with emphasis on infrastructure development, digital transformation and energy transition. It promotes the idea of 'local to global' and is welfare-oriented. To align the financial sector with India's next phase of growth, a high-level committee will comprehensively review the sector and safeguard financial stability, inclusion, and consumer protection.

The Union Budget 2026-27 reflects the government's commitment to sustainable and inclusive growth, with a focus on enhancing value-added manufacturing and strengthening India's standing in the world. It lays the foundation for a more formal, skilled, and geographically distributed talent ecosystem. The budget aims to empower youth and strengthen access to healthcare and education. It is designed to push the Indian economy to maintain its growth momentum, while continuing to focus on structural reforms that enhance productivity, competitiveness, and long-term stability.

While the market reaction to the budget presentation was initially negative, with stock indices falling, various stakeholders have expressed optimism about the budget's long-term impact. Overall, the budget signals continuity in policy direction and efforts to unlock India's economic potential at scale.