Union Budget sets Centre’s capital expenditure target at ₹12.2 lakh crore; India must stay deeply integrated with global markets, attracting stable long-term investment, says Finance Minister

Union Budget sets Centre’s capital expenditure target at ₹12.2 lakh crore; India must stay deeply integrated with global markets, attracting stable long-term investment, says Finance Minister

While acknowledging the strains created by the external global environment, Union Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026 in Parliament, with the aim ofi ncreasing productivity across sectors and ensuring employment generation.

Presenting her record ninth consecutive Budget, Ms. Sitharaman said India must remain deeply integrated with global markets, exporting more, and attracting stable long-term investment.

The Budget announced several customs duty reductions aimed at boosting exports of marine, leather, and textile products, and speeding up India’s energy transition. It also announced multiple infrastructure projects. Notably, the Budget did not include any major direct tax rate relaxations, either for individuals or corporations.

Growth push

The Budget also set the Centre’s capital expenditure target at ₹12.2 lakh crore in 2026-27, higher than the ₹10.9 lakh crore as per the Revised Estimates of 2025-26, as well as the ₹11.2 lakh crore initially budgeted that year.

“This Budget being the first Budget in the second quarter of the 21st Century, also leading to Viksit Bharat 2047, we are laying the path and giving a push to the economy to maintain the growth momentum,” Ms. Sitharaman said in her post-Budget press conference. “For that sustained growth, primarily we are looking at building the ecosystem with structural reforms to make sure we create an environment to increase productivity and make sure employment is generated.”

In order to achieve these goals, Ms. Sitharaman said the Budget was structured along three kartavyas or duties. “Our first kartavya is to accelerate and sustain economic growth, by enhancing productivity and competitiveness, and building resilience to volatile global dynamics,” she said. The second kartavya, she added, was to fulfil the aspirations of the Indian people and build their capacity.

“Our third kartavya, is to ensure that every family, community, region and sector has access to resources, amenities and opportunities for meaningful participation,” she said.

The Budget also included several customs duty reductions aimed at boosting exports of marine, leather, and textile products, and speeding up India’s energy transition.

“We now propose to support the mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing,” Ms. Sitharaman announced in her speech.

Ms. Sitharaman also announced that the first of the new national waterways to be constructed would be in Odisha, connecting places such as Talcher and Angul and Kalinga Nagar to the Paradip and Dhamra ports.

The Budget also included the announcement of an integrated East Coast Industrial Corridor connecting Durgapur in West Bengal, as well as a new dedicated freight corridor connecting Dankuni in West Bengal to Surat in Gujarat.

The Finance Minister said that her first kartavya would be met through targeted measures in six areas: scaling up manufacturing in seven strategic and frontier sectors; rejuvenating legacy industrial sectors; creating “champion MSMEs”; a powerful push for infrastructure creation; ensuring long-term energy security and stability; and developing city-economic regions.

The second kartavya focused on measures targeted at the services sector through the education, training and skilling of the workforce in areas such as healthcare, medical tourism, animal husbandry, animation, visual effects, gaming and comics (AVGC), and design.

Announcements under the third kartavya included measures to increase farmer incomes through productivity enhancement and entrepreneurship, empowering India’s divyang and vulnerable population through livelihood opportunities, training, high-quality assistive devices, and access to mental health and trauma care.