NEW DELHI — In a strategic move to navigate global economic volatility, Prime Minister Narendra Modi’s administration unveiled its annual budget to Parliament on Sunday, emphasizing sustained growth through infrastructure investment and manufacturing expansion while maintaining fiscal discipline.
Finance Minister Nirmala Sitharaman presented the 2026-27 fiscal blueprint against a backdrop of international challenges including elevated interest rates, geopolitical friction, and protectionist trade policies. The budget, effective April 1, aims to position India more prominently within global supply chains while building domestic economic resilience.
Notably absent were populist measures, with the government instead focusing on structural reforms targeting seven strategic sectors: biopharmaceuticals, semiconductors, electronics components, and rare earth magnets. The budget allocates 12.2 trillion rupees ($133 billion) for capital expenditure—primarily infrastructure—representing an increase from the previous year’s 11.2 trillion rupees.
The government reaffirmed its commitment to fiscal consolidation, targeting a reduced deficit of 4.3% of GDP for the coming year, down from the anticipated 4.4% for the current fiscal ending March. This restraint comes despite projections from Thursday’s economic survey forecasting 6.8-7.2% growth fueled by rising domestic consumption.
Key initiatives include establishing three chemical production parks to reduce import dependency, enhancing credit support for small and medium enterprises, and undertaking a comprehensive review of foreign investment rules to attract capital amid competitive global markets.
Transportation infrastructure received significant attention, with plans for seven high-speed rail corridors connecting major cities, new dedicated freight corridors for rare earths, and the operationalization of 20 waterways over five years. The budget also includes provisions for developing ecological tourism trails in mountainous and coastal regions.