Union Budget 2026-27 Presented with Strong Focus on Capital Expenditure and Strategic Sectors
Finance Minister Nirmala Sitharaman today presented the Union Budget 2026–27 in Parliament, outlining the government's economic roadmap for the upcoming fiscal year. The budget continues the administration's emphasis on capital expenditure, manufacturing competitiveness, and large-scale infrastructure creation as key drivers of growth.
Key Budgetary Allocations and Fiscal Targets
The government has set an ambitious capital expenditure target of Rs 12.2 lakh crore for Financial Year 2027, signaling a sustained commitment to infrastructure development. This substantial allocation aims to accelerate road quality improvements, enhance mobility ecosystems, and support broader economic expansion. The budget also maintains a focus on fiscal consolidation, with the fiscal deficit projected at 4.3% of GDP, striking what many analysts describe as a prudent balance between growth stimulus and macroeconomic stability.
Industry Reactions: Automotive and Manufacturing Sectors Respond
Leaders from across India's automotive and manufacturing landscape have welcomed the budget's strategic direction, particularly its emphasis on policy stability and sector-specific initiatives.
Hardeep Singh Brar, President and CEO of BMW Group India, highlighted the budget's dual focus. "The Union Budget 2026–27 reflects a clear intent to balance fiscal consolidation with the need to sustain growth momentum," he stated. Brar specifically praised reforms in tax compliance, including the extension of Advance Rulings validity in customs duty from three to five years, which he noted would provide greater certainty for business operations.
From the tyre industry perspective, Dr. Raghupati Singhania, Chairman & Managing Director of JK Tyre & Industries, pointed to the role of sustained infrastructure spending. "The continued drive on capital expenditure, with infrastructure allocation exceeding Rs 12 lakh crore, alongside fiscal consolidation at 4.3%, strikes a prudent balance," he remarked. Singhania also welcomed enhanced support to the Self-Reliant India Fund, which he believes will strengthen the manufacturing and MSME ecosystem.
Strategic Focus on Semiconductors, Rare Earths and Clean Mobility
The budget's attention to strategic sectors such as semiconductors, rare earths, and clean mobility has drawn particular praise from electric vehicle manufacturers and advanced technology companies.
Madhumita Agrawal, Founder & CEO of Oben Electric, emphasized the importance of domestic supply chain development. "The Union Budget's focus on expanding the Rare Earth Permanent Magnet Scheme and building dedicated rare earth corridors is a positive step towards reducing import dependence for critical materials used in EV manufacturing," she said. Agrawal further highlighted how semiconductor and electronics manufacturing initiatives would contribute to long-term supply stability in the EV sector.
Echoing this sentiment, Vikas Singh, MD of Greaves Electric Mobility, noted the strategic importance of domestic mining and research. "The Union Budget's decision to promote the mining and research for Rare earth permanent magnets in India's mineral-rich states is a positive development towards deepening India's domestic capacity," he stated.
Broader Economic Vision and Competitiveness Agenda
Several industry leaders connected the budget's measures to India's broader economic vision and global competitiveness.
Dr. Anish Shah, Group CEO & MD of Mahindra Group, welcomed the focus on competitiveness and inclusive growth. "This Budget focuses on enhancing India's competitiveness in the world, takes meaningful steps towards atmanirbharta and enables a wider participation in the benefits of economic growth," he said, underlining the importance of capital expenditure and SME support in driving job creation and regional development.
Piyush Arora, Managing Director & CEO of Skoda Auto Volkswagen India, emphasized the value of policy stability for long-term investments. "It sends a strong message of policy stability, which is essential for sustained manufacturing investments," he noted, adding that the focus on SMEs and industrial clusters aligns with his group's localization and skilling roadmap in India.
Infrastructure Development in Tier II and III Cities
The budget's implications for smaller cities and MSMEs were also highlighted by industry representatives.
Sidhartha Bhushan Khurana, Managing Director of STUDDS Accessories Ltd., pointed to the importance of infrastructure development in Tier II and III cities. "The Union Budget 2026 provides a steady and pragmatic framework for India's manufacturing transition," he said, while also underscoring the role of skilling initiatives and road safety measures in building a resilient manufacturing ecosystem.
Similarly, Jalaj Gupta, Managing Director of Montra Electric, welcomed the budget's clean mobility and advanced manufacturing measures, stating, "This year's Union Budget lays a strong foundation for India's clean mobility and advanced manufacturing ambitions."
Overall, the Union Budget 2026–27 has been received as a comprehensive document that reinforces India's commitment to manufacturing-led growth, strategic self-reliance, and sustainable economic expansion through targeted investments and policy reforms.
