Finance Minister Outlines Budget 2026-27's Focus on Employment, Defence Growth, and Trade Modernization
Finance Minister Nirmala Sitharaman has emphasized that the Union Budget for 2026-27 places job creation at its core, aiming to narrow India's per-capita income gap with advanced economies. In an exclusive interview, she detailed multiple proposals spanning customs reforms, defence sector investments, state capital expenditure, and rural employment program revamps.
Customs Reforms to Continue with Focus on Automation
Sitharaman confirmed that the government's customs modernization agenda will persist beyond current measures. The Budget has already introduced reforms including rationalized duties for aircraft engines and parts, import duty exemptions for nuclear power project goods, and duty-free capital goods for lithium-ion cell manufacturing. Passenger baggage rules have also been simplified.
"All that has been done till now. We'll still have some more work done," the minister stated, highlighting future priorities. "It could be for scanning of goods—Can it be completely mechanized? Can it be devoid of human interface?" This indicates a shift toward fully automated customs processes to enhance efficiency.
Defence Sector Attracts Massive Investor Interest
The defence sector is witnessing unprecedented investment enthusiasm, according to Sitharaman. With a record allocation of ₹7.85 trillion to the Defence Ministry in Budget FY27, the sector is poised for growth. Investors are keen not only on meeting domestic requirements but also on exporting from India, attracted by the success of indigenous equipment, artillery, and ammunition.
"People are willing to come and partner with Indian companies," she noted, underscoring the sector's potential as a global manufacturing and export hub.
Job Creation Central to Bridging Income Gaps
To address the per-capita income disparity, the Budget introduces several job-oriented initiatives:
- Medical hubs across the country to generate opportunities for radiologists, anesthetists, and paramedics.
- Rare-earth mineral corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to boost mining and processing jobs.
- Animal husbandry improvements in rural areas, requiring more veterinary doctors and testing lab personnel.
A permanent committee will advise on updating course content to align with industry needs, ensuring youth are employment-ready. Additionally, a standing committee on education, employment, and enterprise will focus on making services a core growth driver, targeting a 10% global share by 2047.
State Capex and Rural Employment Program Overhaul
Sitharaman addressed states' demands regarding central cesses and surcharges, affirming these as constitutional rights of the Centre. However, a component within the Centre's ₹12.21 trillion capex is earmarked to support states' capital investments, incentivizing state-level reforms through the Special Assistance to States for Capital Investment (Sasci) scheme.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has been revamped as the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission to address efficiency challenges. "MGNREGA has gone through a serious challenge of efficiency," Sitharaman remarked, citing issues like elderly enrollment in urbanized states. Budget 2026-27 allocates nearly ₹1.26 trillion combined for the new and existing rural jobs schemes, with ₹95,692 crore for the revamped program.
Urban Development and Internship Schemes
The Centre expects states to propose city development projects as growth engines, with funding of ₹5,000 crore per city available on a challenge mode basis. "It's for the states to rise up and ask for it," Sitharaman emphasized.
Pilot programs for the PM internship scheme have been completed, with lessons learned. The government is seeking cabinet approval to launch the full program, aimed at providing corporate exposure to youth.
Overall, Budget 2026-27 reflects a comprehensive strategy to boost employment, attract investments, and modernize systems, positioning India for sustained economic growth.
