Kamal Ghorui
Budget 2026-27 trails the growth path like the earlier ones presented by the finance minister Nirmala Sitharaman. However, in view of the volatile international environment due to geopolitical tensions and tariff wars, the strategy is to first pluck the lowest hanging fruits.
Hence, the sectors focused are those where the gestation period and quantum investments are lower. Therefore, the budget centres on improving the ease of doing business, supporting the MSME sector with credit and technology and harnessing the vast potential of tourism in India to earn foreign exchange.
In ease of doing, Individual Persons Resident Outside India (PROI) will be allowed higher investment (individual 5 to 10 % and total 10 to 24%) in the listed Indian companies through the Portfolio Investment Scheme.
The Central and state governments will come out with deregulation and reduce compliance requirements. It is proposed to scale up manufacturing in seven strategic sectors.
The first will be the creation of an ecosystem for bio-pharmacy with an outlay of RS 10000 crore over the next five years in setting up 3 new National Institutes of Pharmaceutical Education & Research (NIPERs) and upgrading existing ones to create 1000 clinical trial sites.
Second, the electronic components manufacturing scheme will be capitalised with an outlay of Rs 40,000 crore. Rare earth corridors and chemical parks will be set up to reduce our dependency on imports.
A world-class container manufacturing ecosystem will be implemented with a budgetary allocation of Rs 10000 crore.
A SME growth fund of Rs 10000 crore will be set up to incentivise select(champion) SMEs.
Professionals will be trained for the SMEs in the tier II and III towns at a reasonable cost.
Tourism will be another green Sector for earning foreign exchange and employment generation at the local level.
A pilot scheme will be launched for up-skilling 10000 guides in 20 iconic tourist sites through a 12-week training in collaboration with an Indian Institute of Management.
To document all places of cultural, spiritual and heritage significance, a National Digital Knowledge Grid will be compiled.
Special attention will be on 15 archaeological sites in different states.
World-class tracking and hiking trails will be developed in Himachal Pradesh, Uttarakhand, Jammu &Kashmir and in the eastern and western ghats. Turtle and bird watching trails will be developed in the potential areas of southern states.
Medical tourism service will be encouraged by setting five regional medical hubs, including the Ayush Centres, in partnership with the private sector.
Three new all-India institutes of Ayurveda as per the experience of the WHO Global Traditional Medicine Centre at Jamnagar. Buddhist circuits will be developed in Arunachal Pradesh, Sikkim, Assam, Manipur, Mezoram and Tripura.
The prudential approach for instant benefits with low investment is visible in budgetary allocation too.
The overall increase in budgeted estimates is just 7.7 per cent over revised budget estimates of the previous year. But some small and critical sectors like the scientific department and urban development have seen about a 50 per cent increase over the previous year.
Higher urban allocation is justified considering the Cities as engines of growth, innovation and opportunities.
To compete at the international level, commerce and industry, Information Technology and Telecommunications and Energy sectors have also been given a higher allocation of around 30 per cent over the previous year’s revised estimates.
The other sectors have been given usual allocations. The subsidy on fertilisers, food and petroleum has been capped. The capital investment has been increased to Rs 12.21 lakh crore from 10.96 lakh crore in the previous year. The FM announced to set up a committee to revamp the banking sector and mobilise more resources.
This higher allocation to smaller but captious sectors has enabled the FM to maintain the revenue deficit at 1.5 per cent of GDP, which is equal previous year’s BE.
Further, the fiscal deficit was reduced to 4.3 per cent in the budget from 4.4 per cent last year and the debt-GDP ratio will also be lower at 55.6 per cent from 56.1 per cent, enabling the FM to maintain the revenue deficit at 1.5 per cent of GDP, which is equal to the previous year’s BE.
Further, the fiscal deficit reduced to 4.3 per cent in the RE from 4.4 per cent last year and the debt-GDP ratio will also be lower at 55.6 per cent from 56.1 per cent.
The increasing inequality and unemployment are major social concern as highlighted in the World Inequality Report 2026 and earlier.
The top 10 per cent earners capture 58 per cent of national income and hold 65 per cent of total wealth.
Despite suggestions, the finance minister has not dared to revive the inheritance tax and wealth tax for additional resource mobilisation and creating employment.
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