Union Budget 2026-27: Focus on Manufacturing, MSMEs, and Fiscal Consolidation

Key facts

• Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27, targeting an economic growth of approximately 7% with a focus on the goal of Viksit Bharat.
• The government announced the India Semiconductor Mission (ISM) 2.0 and the Electronics Components Manufacturing Scheme to strengthen domestic high-value manufacturing.
• New sector-specific initiatives include Biopharma SHAKTI for biotechnology, three dedicated chemical parks, and a scheme for rare earth permanent magnets.
• The budget proposed the revival of 200 legacy industrial clusters and the establishment of hi-tech tool rooms in Central Public Sector Enterprises (CPSEs).
• For Micro, Small and Medium Enterprises (MSMEs), the government announced a ₹10,000 crore SME Growth Fund and a ₹2,000 crore top-up to the Self-Reliant India (SRI) Fund.
• The Trade Receivables Discounting System (TReDS) will be mandatory for all CPSE purchases from MSMEs and will be linked with the Government e-Marketplace (GeM).
• The existing ₹10 lakh per consignment value cap on courier exports for small firms has been removed to encourage international trade.
• The government will support states to set up five hubs for medical value tourism and establish three new All India Institutes of Ayurveda (AIIA).
• A new National Institute of Design (NID) will be established in eastern India, and AVGC content creator labs will be set up in 15,000 secondary schools and 500 colleges.
• The Bharat-VISTAAR initiative will use Artificial Intelligence (AI) to integrate AgriStack portals with Indian Council of Agricultural Research (ICAR) practices.
• Infrastructure projects include 20 new National Waterways and a Dedicated Freight Corridor (DFC) connecting Dankuni in the east to Surat in the west.
• The government allocated ₹2 lakh crore to states under the Scheme for Special Assistance to States for Capital Investment (SASCI).
• The fiscal deficit for 2026-27 is estimated at 4.3% of Gross Domestic Product (GDP), with a target to bring the debt-to-GDP ratio to 50% by 2030.
• The budget provided ₹1.4 lakh crore as Finance Commission grants to states.