Key Highlights

1. Three Kartavyas – The Guiding Pillars

  • Sustain Economic Growth – Boost productivity, competitiveness and resilience.
  • Fulfil Aspirations & Build Capacity – Youth empowerment, skill development and the "Orange Economy".
  • Sabka Saath, Sabka Vikas – Last‑mile inclusion through schemes like Bharat‑VISTAAR, SHE Marts and regional development initiatives.

2. Strategic & Frontier Sectors (Capex‑Heavy)

  • Biopharma SHAKTI – ₹10,000 crore over 5 years for biologics & biosimilars; 3 new NIPERs, upgrade of 7 institutes, CDSCO strengthening.
  • India Semiconductor Mission 2.0 – Focus on equipment, materials, R&D centres and skilled workforce.
  • Electronics Components Manufacturing Scheme – Outlay raised to ₹40,000 crore.
  • Rare‑Earth Corridors & Chemical Parks – Mining & processing in Odisha, Kerala, AP, Tamil Nadu; REPM production.
  • Capital Goods & Container Manufacturing – Hi‑Tech Tool Rooms, CIE Scheme, ₹10,000 crore Container Scheme.
  • Textiles, Gram Swaraj, Sports Goods, Legacy Industrial Clusters – Integrated programmes and mega‑parks.
  • SME Growth Fund – ₹10,000 crore to create "Champion MSMEs"; Self‑Reliant India Fund +₹2,000 crore.

3. Infrastructure as "Growth Connectors"

  • High‑Speed Rail Corridors – 7 routes (e.g., Mumbai‑Pune, Delhi‑Varanasi).
  • Dedicated Freight Corridors & National Waterways – New DFC (Dankuni‑Surat) + 20 waterways.
  • Coastal Cargo Promotion Scheme – Raise waterway share to 12% by 2047.
  • Seaplane VGF Scheme – Indigenous seaplane manufacturing.
  • Infrastructure Risk Guarantee Fund – Partial credit guarantees for lenders.
  • City Economic Regions (CERs) – ₹5,000 crore per region for 5 years.
  • Carbon Capture, Utilisation & Storage (CCUS) – Decarbonise steel & cement.

4. Capacity‑Building & Inclusive Initiatives

  • AVGC Content Creator Labs – 15,000 schools & 500 colleges.
  • National Institute of Hospitality – Upgrade of NCHMCT.
  • Khelo India Mission – Integrated talent, coaching, sports science.
  • Regional Medical Hubs – 5 hubs for medical tourism.
  • Women in STEM – Girls’ hostels in every district.
  • Bharat‑VISTAAR – AI‑driven agri advisory platform.
  • SHE Marts – Community‑owned retail outlets.
  • Mental Health Infrastructure – NIMHANS‑2 and regional apex institutes.
  • Buddhist Circuits & East Coast Industrial Corridor – Tourism & industrial development.

5. Tax Reforms

  • New Income Tax Act, 2025 – Simplified legislation (effective 1 Apr 2026).
  • TCS & TDS Rationalisation – Uniform 2 % TCS on overseas tours; 1 %/2 % TDS on manpower services.
  • Customs Duty Cuts – Personal use goods from 20 % to 10 %; exemptions on 17 cancer drugs.
  • Securities Transaction Tax (STT) – ↑ to 0.15 % in select segments.
  • MAT Exemption for NRIs, Buy‑back Tax Shift, Data Centres Tax Holiday till 2047, IFSC Tax Holiday extended to 20 years.
  • Critical Minerals Duty Exemptions, IT Safe‑Harbour threshold ↑ to ₹2,000 crore.

6. Macro‑Economic Targets

  • Fiscal Deficit – 4.3 % of GDP (BE 2026‑27).
  • Debt‑to‑GDP – 55.6 % (target 50 % by 2030‑31).
  • Capex – ₹12.2 lakh crore (≈3.1 % of GDP); effective capex ₹17.1 lakh crore (≈4.4 % of GDP).
  • GDP Growth Assumptions – Nominal 10.5 %, Real ~7 % for FY 2026‑27.
  • Revenue – Non‑debt receipts ₹36.5 lakh crore; net tax receipts ₹28.7 lakh crore.

7. Concerns & Critical Analysis

  • Global Headwinds – Growth assumptions vulnerable to slowdown, geopolitics.
  • Revenue Shortfalls – Income‑tax & GST gaps limiting fiscal space.
  • Implementation Risks – High‑tech schemes need strong institutions; land‑acquisition bottlenecks.
  • Jobless Growth – Capital‑intensive focus may not generate mass employment.
  • Green Transition Pressures – Critical mineral imports, water & energy demand.
  • External Financing Uncertainty – FPI outflows, FDI outlook.

8. Way Forward (Beyond Budget)

  • Demand‑Side Revitalisation – Accelerate SHE Marts, Bharat‑VISTAAR.
  • Strategic Autonomy in Critical Minerals – Domestic corridors + overseas partnerships.
  • Skilling for New Sectors – Aggressive Skill India 2.0 for AVGC & semiconductors.
  • Outcome‑Based Expenditure – Audits linking outlays to tangible assets.
  • Correct Inverted Duty Structures – Align tariffs to favour domestic manufacturing.

Exam‑Relevant Points

  • Prelims – Figures (outlays, fiscal targets), new schemes (Biopharma SHAKTI, ISM 2.0), tax changes (STT, Income Tax Act 2025).
  • Mains – Role of budget in fiscal consolidation, manufacturing‑led growth vs employment, strategic autonomy in critical minerals, inclusive development through Kartavyas.

Prepared for UPSC CSE – Prelims & Mains