Union Budget 2026-27: Major Highlights and Industry Impact

PART-A- MAJOR HIGHLIGHTS OF UNION BUDGET 2026-27

• FINANCIAL SECTOR & CAPITAL MARKETS

• High-Level Committee on Banking for Viksit Bharat

A high-level committee will review banks and NBFCs to strengthen the financial system, improve efficiency and scale, and ensure stability, inclusion and consumer protection for India’s next phase of growth.

• Restructuring of PFC and REC

Power Finance Corporation and Rural Electrification Corporation will be restructured to enhance operational efficiency, scale and infrastructure financing in the power and energy sector.

• Review of FEMA (Non-Debt Instruments) Rules

The FEMA (Non-Debt Instruments) Rules will be comprehensively reviewed to create a simplified, modern and investor-friendly framework aligned with India’s evolving economic priorities.

• Deepening Corporate and Municipal Bond Markets

Measures will be taken to strengthen corporate bond markets and incentivise large municipal bond issuances to support urban infrastructure financing.

• Liberalization of Portfolio Investment Scheme for PROIs

Investment limits for overseas individuals in listed Indian companies has been increased from 5% to 10%, while the overall combined limit for all such investors will increase from 10% to 24%under the Portfolio Investment Scheme to improve market liquidity and attract greater global participation.

 

• MANUFACTURING & INDUSTRIAL GROWTH:

 

1. 1. Introduction of Biopharma SHAKTI with an outlay of ₹ 10,000 crores over the next 5 years with focus on biologics & biosimilars, 3 new NIPERs, 7 upgraded NIPERs, 1,000+ accredited clinical trial sites and Strengthening CDSCO with scientific review cadre.
   2. Launch of India Semiconductor Mission (ISM) 2.0 to produce equipment and materials, design fullstack Indian IP, and fortify supply chains.
   3. Increase of the outlay of Electronics Components Manufacturing Scheme from ₹22,919 crore  to ₹40,000 crore.
   4. Dedicated Rare Earth Corridors in States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu.
   5. Establishment of 3 dedicated Chemical Parks
   6. For Capital Goods & Heavy Engineering, (a) Establishment of Hi-Tech Tool Rooms by CPSEs at 2 locations (b) New Scheme for Enhancement of Construction and Infrastructure Equipment (CIE) and;(c)  New Scheme for Container Manufacturing with a budgetary allocation of ₹10,000 crore over a 5 year period.
   7. Under Textiles & Village Industries,(a) Integrated Textile Programme (Fibre, clusters, handloom, sustainability, skilling)(b) Mega Textile Parks (challenge mode)and;(c) Mahatma Gandhi Gram Swaraj Initiative for khadi, handloom, handicrafts

• Dedicated initiative for R&D, materials science, global competitiveness for Sports Goods Manufacturing

1. New Scheme for Rejuvenation of 200 Legacy Industrial Clusters

 

• MSMEs & MICRO ENTERPRISES

 

1. Equity Support covering ₹10,000 crore SME Growth Fund and ₹2,000 crore top-up to Self-Reliant India Fund
2. Liquidity Support providing Mandatory TReDS usage for CPSE MSME purchases, Credit guarantee for TReDS invoice discounting, GeM–TReDS integration and Securitisation of TReDS receivables
3. Professional Support thru“Corporate Mitras” via ICAI, ICSI, ICMAI with Affordable compliance support in Tier-II/III cities

 

• INFRASTRUCTURE & URBAN DEVELOPMENT

 

1. Capex increased to ₹12.2 lakh crore
2. Infrastructure Risk Guarantee Fund for construction-phase risks
3. Asset monetisation via CPSE-specific REITs
4. New Dedicated Freight Corridor (Dankuni–Surat)
5. 20 new National Waterways; ship repair hubs at Varanasi & Patna
6. Coastal Cargo Promotion Scheme
7. Seaplane manufacturing & VGF for operations
8. City Economic Regions (CER) with Allocation of ₹5,000 crore per CER (5 years) as form-linked, outcome-based financing
9.  Seven (7) High-Speed Rail Corridors connecting major growth clusters.

 

• ENERGY & CLIMATE

 

1.  Setting up of Carbon Capture Utilisation & Storage (CCUS) with Outlay of  ₹20,000 crore (5 years) 

 

• SERVICES SECTOR & HUMAN CAPITAL

 

1. Education to Employment with setting up High-Powered Standing Committee for services-led growth;
2. Building Health & Care Economy with 1 lakh Allied Health Professionals,1.5 lakh caregivers trained and Medical Value Tourism Hubs (5 regions)
3. Under AYUSH, 3 new All India Institutes of Ayurveda and Upgraded labs & WHO Centre at Jamnagar
4. Creative & Knowledge Economy with setting of AVGC labs in 15,000 schools & 500 colleges, New National Institute of Design (Eastern India), University Townships near industrial corridors, Girls’ hostels in every district and Advanced astronomy infrastructure.

• TOURISM, CULTURE & SPORTS

 

1. Setting up of National Institute of Hospitality
2. Guide upskilling at iconic sites
3. Digital Knowledge Grid for destinations
4. Eco-tourism trails (mountain, turtle, birding)
5. Archaeological site development
6. Khelo India Mission for sports ecosystem transformation

 

• AGRICULTURE & RURAL PROSPERITY

 

1. 1. Fisheries, livestock, high-value crops
   2. Coconut Promotion Scheme
   3. Cashew & cocoa self-reliance programme
   4. Sandalwood ecosystem revival
   5. Nut orchards rejuvenation
   6. Bharat-VISTAAR AI-based agri advisory

• SHE-Marts for women-led enterprises

•  SOCIAL INCLUSION & REGIONAL DEVELOPMENT

 

1. Divyangjan Kaushal & Sahara Yojanas
2. Assistive Technology Marts
3. NIMHANS-2 & trauma care expansion
4. Purvodaya East Coast Industrial Corridor
5. Buddhist circuits in North-East

 

Part-B- Industry Wise Impact

S. N.	Sector/ industry	Budget Measures	Analysis	Impact/ remarks
1.	Banking	High-Level Committee on Banking for Viksit Bharat Continued focus on financial stability and inclusion	The banking industry is set to benefit from the upcoming wave of structural reforms, which will help enhance scale, governance, and efficiency. With asset quality touching historic highs and high capital adequacy ratios, banks are poised to support higher credit growth. However, the lack of an immediate regulatory easing indicates that the gains will be realized over time.	Positive (Medium-term)
2.	NBFCs & Infrastructure Finance	Restructuring of PFC and REC Infrastructure Risk Guarantee Fund Bond market development	Strengthening of public sector NBFCs supports long-term infrastructure and energy lending. Risk-sharing arrangements improve the bankability of large projects. Private NBFCs could be impacted by competition from stronger public institutions, but they will also benefit from more developed capital markets.	Positive
3.	Manufacturing & Industrial Sector	Schemes for biopharma, semiconductors, electronics, chemicals, textiles, capital goods Rare earth corridors and cluster development	The Budget is highly supportive of the growth of manufacturing, import substitution, and export competitiveness. Emphasis on technology, skill development, and value chains is in line with the global trends in supply chains. Capital-intensive sectors might not easily involve MSMEs.	Strongly Positive
4.	MSMEs	₹10,000 crore SME Growth Fund Expanded TReDS framework Credit guarantees and compliance support	Better access to equity and working capital will improve the growth prospects of MSMEs. Compulsory digital platforms may pose an initial problem to smaller entities but will help in formalization and scalability in the long run.	Positive
5.	Infrastructure & Construction	Public capex increased to ₹12.2 lakh crore Freight corridors, waterways, high-speed rail, urban infrastructure	Continued capex spending will ensure continued order flow for EPC, logistics, and construction firms. Risk guarantees will further improve private sector participation. Efficiency in execution is still very important.	Very Positive
6.	Healthcare & Pharmaceuticals	Biopharma SHAKTI Expansion of clinical trials and allied health training Medical value tourism hubs	Improves India’s competitiveness in high-end pharma and healthcare delivery. Exports, R&D, and skilled employment are encouraged.	Positive
7.	Technology, Electronics & AI	Semiconductor Mission 2.0 Electronics manufacturing expansion AI and research ecosystem support	Boosts India’s competitiveness in strategic tech domains. Although barriers to entry are high, this may not immediately help SMEs but will attract large investments.	Strongly Positive
8.	Tourism, Hospitality & Services	Tourism infrastructure and skilling Heritage development and eco-tourism	Encourages job creation, foreign exchange earnings, and development of regions. Last-mile connectivity and private sector involvement are critical for success.	Positive
9.	Education & Skill Development	University townships AVGC labs and design institutes Girls’ hostels	Improves employability and innovation capabilities, especially in the service and creative sectors. Long gestation period before measurable outcomes.	Positive (Long-term)
10.	Urban Development & Real Estate	Municipal bond incentives City Economic Regions REIT-based asset monetisation	Enhances urban infrastructure funding and recycling. Smaller cities might have capacity limitations in accessing bond markets.	Positive

 

OVERALL ASSESSMENT

The Union Budget for 2026-27 is a reform, investment, and future-oriented budget. It has medium to long-term growth, competitiveness, and fiscal responsibility as its focus areas, with very little emphasis on short-term consumption drivers.