Prime Minister Narendra Modi on Saturday said the Union Budget 2026 strikes a fine balance between high capital expenditure and sustained economic growth, calling it a roadmap for long-term national development.

Speaking after Finance Minister Nirmala Sitharaman presented her ninth consecutive Budget, the prime minister said the proposals reflect a vision of trust-based governance and a human-centric economic framework. He added that India is not just focused on being the fastest-growing economy but is working towards becoming the world’s third-largest economy.

PM Modi said the Budget also reinforces India’s strong global standing and will provide fresh momentum to the country’s reform agenda. According to him, the measures announced will energise what he described as India’s “reform express”.

The prime minister highlighted the Budget’s focus on promoting tourism in the northeastern region, noting that it would create new opportunities and support regional development.

On fiscal management, the finance minister retained the states’ share in the divisible pool of central taxes at 41 per cent. She announced that Rs 1.4 lakh crore has been provided to states as Finance Commission grants for 2026–27, in line with the recommendations of the commission.

The Finance Commission, chaired by Arvind Panagariya, had submitted its report to the President in November 2025 after consultations with states and Union Territories, several of which had sought a higher share.

Sitharaman pegged the fiscal deficit for 2026–27 at 4.3 per cent of GDP, lower than the revised estimate of 4.4 per cent for 2025–26. She also said the debt-to-GDP ratio is projected to decline to 55.6 per cent in 2026–27 from 56.1 per cent in the previous fiscal.

A gradual reduction in the debt burden will help free up resources for priority sectors by lowering interest outgo, the finance minister said.

Finance Minister Nirmala Sitharaman, presenting the Union Budget 2026-27 in Parliament on Sunday, announced that India will develop seven high-speed rail corridors connecting key cities across the country.

These corridors, described as ‘growth connectors’, aim to promote environmentally sustainable passenger transport systems. The proposed high-speed rail links will connect:

• Mumbai and Pune
  
• Hyderabad and Pune
  
• Hyderabad and Bengaluru
  
• Hyderabad and Chennai
  
• Chennai and Bengaluru
  
• Delhi and Varanasi
  
• Varanasi and Siliguri
  

In addition to passenger rail, Sitharaman announced a dedicated east-west freight corridor connecting Dankuni in the east with Surat in the west. This initiative, along with the operationalisation of 22 new national waterways over the next five years, is intended to enhance multimodal transport and reduce logistics costs.

“These initiatives will strengthen freight movement and support sustainable cargo transportation,” the Finance Minister said.

The Budget also emphasizes infrastructure development in cities with populations over five lakh (Tier II and Tier III), which have emerged as key growth centres. Sitharaman further proposed a public capital expenditure of Rs 12.2 lakh crore for the financial year 2026-27.

She outlined that the Union Budget is guided by three core responsibilities—accelerating economic growth, fulfilling aspirations, and ensuring equitable access to resources for families, communities, and regions.

Describing the plans as part of a broader reform agenda, she added, “The ‘Reform Express’ is on its way.”

Presenting her ninth consecutive Union Budget today, Finance Minister Nirmala Sitharaman announced a Rs 40,000 crore allocation for the semiconductor industry under the newly launched India Semiconductor Mission 2.0. The move aims to build on the momentum of the first semiconductor mission initiated in January 2022.

Sitharaman highlighted that the mission will focus on industry-led research and training centres, as well as the production of equipment and materials for full-stack Indian intellectual property (IP).

“Semiconductor Mission 2.0 will focus on producing equipment and materials designed for full-stack Indian IP,” she said.

The Finance Minister also emphasised that the Budget follows a path of reforms over rhetoric, aiming to position India on the trajectory toward becoming a Viksit Bharat.

Earlier this month, Union Electronics and IT Minister Ashwini Vaishnaw stated that India is on track to begin commercial semiconductor chip production in 2026, in line with the timeline of the original semiconductor mission. Pilot production has already started at three plants in 2025, with four plants expected to begin operations this year.

Analysts note that India, as the world’s fastest-growing major economy, is expected to continue prioritising defence, infrastructure, capital expenditure, power, and affordable housing in fiscal year 2026–27.