Fiscal Deficit: Target set at 4.3 % of GDP for FY 2026–27 (down from ~4.4 % current), showing continued fiscal consolidation.
GDP Growth: Real GDP estimated to grow ~7.4 % for 2025–26 with a projected nominal growth of ~10 % for 2026–27.
Total Budget Outlay: Around ₹53.5 lakh crore for FY 2026–27.
Capital Expenditure: Allocated ₹12.2 lakh crore — the highest ever in India’s history — to support infrastructure and growth. These targets emphasize a balance between fiscal discipline and investment-led expansion.
🧮 2. Taxation & Compliance Reforms
✔ Direct Tax Measures
New Income Tax Act, 2025: To be implemented from April 1, 2026 with simplified rules and redesigned return processes aimed at reducing compliance burden.
Return Revision: Taxpayers can revise income tax returns up to 31 March of next year (extended from earlier timelines).
Foreign Asset Disclosure Window: One-time 6-month window for disclosure of foreign assets/income to ease compliance. These changes aim to make tax filing clearer and less punitive.
✔ TCS & TDS Adjustments
LRS TCS Rates Cut: Overseas tour packages, education, and medical remittances under the Liberalised Remittance Scheme (LRS) see TCS reduced to 2 %, down from 5–20 %.
Concessional TDS: Lower TDS rates (1–2 %) on manpower services and related transactions. Reducing collection burdens on common expenditures overseas reduces everyday costs for citizens.
✔ Penalty & Litigation Reforms
Pre-deposit for tax disputes reduced from 20 % to 10 %.
Procedural defaults decriminalised; minor non-compliance attracts immunity on payment of additional tax. These moves are targeted to ease dispute resolution and compliance anxiety.
🚆 3. Infrastructure & Connectivity Push
🏗 Record Capital Spending
Public CapEx Increase: ₹12.2 lakh crore, nearly 9 % more than last year’s.
Infrastructure Risk Guarantee Fund: Helps share project risk with lenders to attract private investment.
Special Assistance to States: Increased capital investment support to amplify infrastructure rollout nationwide. This reflects the government’s continued prioritization of building physical and logistical assets.
🚄 Major Projects
Dedicated Freight Corridors: New corridors like Dankuni–Surat to improve logistics.
High-Speed Rail Corridors: Seven new corridors announced to connect key metro and regional hubs.
20 National Waterways: To be operationalised in the next 5 years, enhancing inland and coastal freight movement.
Coastal Cargo Promotion Scheme: Incentives to increase coastal shipping share.
Ship Repair Ecosystems: Promoted for waterways to support cargo movement. These efforts aim to lower transport costs and improve economic linkages across regions.
🏙 Urban & City Growth
City Economic Regions (CERs): Framework to develop Tier-II & III cities and temple towns with dedicated funding. CERs will help balance economic activity and pull urbanization benefits beyond primary metros.
🏭 4. Manufacturing, Strategic Sectors & Tech
🔋 Manufacturing & Value Chains
Rare Earth Corridors: Support for mineral-rich states (Odisha, Kerala, AP, TN) from extraction to processing and manufacturing.
Chemical and Container Parks: Cluster-based models for competitiveness.
Capital Goods & Tool Rooms: Hi-Tech Tool Rooms for precision manufacturing. These aim to boost domestic manufacturing capability and reduce import dependence.
💻 Technology & Semiconductors
India Semiconductor Mission 2.0: Scales up semiconductor manufacturing, supply chain and training initiatives.
Data Centre & Cloud Policies: Long-term tax holiday up to 2047 to attract foreign cloud providers using Indian data centres.
AI & Digital Customs: AI tools for agriculture and AI scanning platforms for customs integrated systems. This positions India as a competitive player in advanced technology and digital infrastructure.
🧠 5. MSMEs, Exports & Business Support
🛠 MSME Sector
₹10,000 crore SME Growth Fund: To support scaling and competitiveness.
Self-Reliant India Fund Top-up: Additional capital infusion.
Corporate Mitras Initiative: Helps MSMEs with compliance and procedural support. These measures aim to strengthen small business growth, liquidity and formalisation.
🎯 Export & Strategic Clusters
Focus on Mega Textile Parks, integrated textile support schemes, and legacy industrial cluster revivals to boost employment and exports.
Sports Goods Initiative: Dedicated strategy for sports equipment manufacturing. This improves value addition in both traditional and modern sectors.
🌾 6. Agriculture & Rural Development
500 Reservoirs & Amrit Sarovars Initiative: Integrated development for irrigation, fisheries, and rural livelihoods.
Support for allied sectors like dairy, poultry, coconut, cashew and cocoa value chains.
AI-based tools for improving agricultural productivity and advisory services. These support rural incomes and agricultural resilience.
💡 7. Financial Sector, Markets & Credit
NBFC Role Strengthened: Clearer role for NBFCs to expand credit to underserved sectors and MSMEs.
Municipal Bonds Incentives: To support city infrastructure financing.
Easier Foreign Investment Rules: Reforms to FEMA non-debt instruments and higher PROI investment limits.
STT Changes: Increases proposed on futures and options — a mixed impact for markets. These aim to deepen financial markets and broaden credit access to growth segments.
🎓 8. Education, Skills & Social Programs
Fellowships & Research Support: 10,000 research fellowships in tech institutes.
Girls’ Hostels in STEM: One per district to boost women’s participation.
Tourism Training & AVGC Labs: Skills development for tourism guides and studios for animation, VFX, Gaming & Comics. Human capital investments are highlighted across education and employment.
🏥 9. Health & Welfare
Health Allocation Increased: Over ₹1,06,000 crore for health and family welfare (up ~10 %).
Cancer & Critical Drugs: Customs duty exemptions to make medicines more affordable.
Medical Tourism Boost: Infrastructure and policy support for medical tourism growth. This builds on preventive and affordable healthcare initiatives.
