The Union Budget 2026–27 underscores policy continuity, fiscal discipline, and an investment-driven growth strategy, as the government aims to sustain economic momentum while reinforcing the foundations for long-term expansion.
India’s macroeconomic position remains stable, with growth indicators described as strong and fiscal targets achieved comparatively smoothly. According to the Economic Survey 2025–26, GDP growth for 2025–26 is estimated at 7.4 per cent, while projections for 2026–27 place growth between 6.8 per cent and 7.2 per cent. Against this backdrop, the Budget seeks to maintain current growth trends while strengthening medium- and long-term economic prospects.
A key focus area is the expansion of manufacturing in strategic sectors, identified as one of six priority themes to accelerate growth. The approach builds on earlier efforts to enhance domestic production capabilities and deepen India’s integration into global value chains, according to an article by Durgesh Rai published on news portal PRF.
In this context, the rollout of India Semiconductor Mission (ISM) 2.0 marks a major policy step. The initiative aims to develop domestic capacity in semiconductor equipment and materials, support full-stack Indian intellectual property design, and improve supply-chain resilience. The programme also envisages industry-led research and training centres intended to strengthen technological capabilities and build a skilled workforce.
Complementing this effort, the allocation for the Electronics Components Manufacturing Scheme, introduced in April 2025, has been raised to Rs 40,000 crore, signalling continued policy emphasis on strengthening India’s electronics manufacturing ecosystem.
The Budget also advances the strategic minerals agenda. Building on the Scheme for Rare Earth Permanent Magnets launched in November 2025, targeted support is proposed for mineral-rich states, including Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. The proposed Rare Earth Corridors are expected to facilitate integrated development across mining, processing, researc,h and manufacturing, to reduce import dependence and strengthen downstream industries.
Beyond high-technology sectors, the Budget outlines broader measures aimed at sustaining growth. These include revitalising legacy industries, promoting ‘Champion MSMEs’, accelerating infrastructure development, ensuring long-term energy stability, and developing City Economic Regions to leverage urban economic clusters.
Measures to attract global investment also feature prominently. A tax holiday extending until 2047 is proposed for foreign companies providing cloud services globally through data centre infrastructure based in India. Additionally, a five-year tax exemption is proposed for non-residents supplying capital goods, equipment or tooling to toll manufacturers operating in bonded zones, aimed at supporting domestic manufacturing capacity.
Labour-intensive sectors receive targeted attention as well. The Budget adopts a three-part support strategy for MSMEs, equity, liquidity and professional assistance, while also proposing an integrated programme for the textile sector to strengthen employment-intensive industries.
At the macroeconomic level, fiscal prudence remains central to the Budget’s approach. The government continues to manage fiscal deficit levels cautiously, balancing growth-oriented expenditure with medium-term fiscal consolidation objectives.
Overall, the Union Budget 2026–27 reinforces a policy framework centred on investment-led expansion, manufacturing competitiveness and incremental reforms while maintaining macroeconomic stability, the article notes.
