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Below Quote on Union Budget 2026 By Dr. Manoranjan Sharma, Chief Economist at Infomerics Valuation and Rating Ltd

Union Budget- Stability over Surprise 

The Union Budget 2026–27 is entirely on our expected lines. Formulated against a backdrop of global economic uncertainty, inflationary pressures, and domestic priorities such as employment generation, manufacturing competitiveness, rural development, and fiscal consolidation, the 

Budget focused on a “three-Kartavya” framework — duties aimed at accelerating growth, empowering citizens, and increasing inclusivity. 

The Budget increased capital expenditure to ?12.2 lakh crore, an 8–9% rise from the previous year, earmarked for infrastructure development — including transport, urban infrastructure, and regional connectivity. Given the high multiplier effect, this is welcome. 

Seven high-speed rail corridors were announced, connecting key economic hubs (e.g., Mumbai–Pune, Pune–Hyderabad, Chennai–Bengaluru), aimed at reducing travel time and enhancing logistics connectivity. This would stimulate employment, improving productivity, and attracting private investment.

But implementation capacity, land acquisition issues, cost overruns and financing sustainability remain challenges. 

Tax Policy: Stability but Limited Relief

Unlike previous years where income tax reforms delivered significant relief (such as raising tax-free limits), major changes to direct tax slabs were limited. Possibly, some income tax relief could have been given. However, there were procedural facilitation measures (staggered timelines for filing returns) and minor enhancements aimed at easing compliance. 

Sectoral Priorities and Structural Reforms

A striking emphasis was on manufacturing promotion — including expansion of the semiconductor mission (ISM 2.0), rare earth corridors, and strategic support for bio-pharma, chemicals, and textiles.

Services Sector and Global Competitiveness

The establishment of an E2E (Education to Employment and Enterprise) standing committee was aimed at strengthening India’s services sector to achieve a targeted global share by 2047.

MSMEs and SME Growth Fund

A dedicated ?10,000 crore SME growth fund was proposed to support small businesses as future job creators. While this  focus will help long-term growth and export competitiveness, it requires efficient execution, easier access to credit, reduction of regulatory hurdles, and technology adoption at scale — particularly for MSMEs lacking capital and scale.

Social Inclusion and Human Capital

Measures, such as, proposed girls’ hostels in every district and diversification of farm produce, productivity enhancement, and integration of fisheries into the market value chain are well-conceived. 

The scale of funding relative to long-standing sectoral needs (e.g., health systems strengthening or unemployment support) is modest and the grassroots implementation will be critical. 

Financial Sector and Regulatory Reforms

Reforms to fortify the financial sector, including establishing high-level committees for banking sector review and facilitating foreign investment frameworks can unlock private investment and reduce systemic risks.

In sum, there is continuity with change with controlled fiscal deficit this year, gradually 

reduced deficit in FY 27and disciplined expenditure and  CapEx-led growth. Strategic support for manufacturing, technology, and SMEs can enhance global competitiveness. Inclusive measures for education, rural livelihoods, and value chains will promote social equity."

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