5 March 2026

Finance Minister presented the Union Budget 2026-27 in the Lok Sabha, announcing a capital expenditure of ₹11.11 lakh crore (3.4% of GDP), the highest ever. Key highlights include ₹3.5 lakh crore for railways, ₹2.4 lakh crore for road infrastructure, a new Viksit Bharat Infrastructure Fund of ₹1.5 lakh crore, and income tax exemption limit raised to ₹15 lakh. The fiscal deficit target is set at 4.4% of GDP.

The Union Budget 2026-27 established the Viksit Bharat Research Initiative (VBRI) with a ₹1 lakh crore corpus funded equally by the government and private sector over 10 years, channelled through the National Research Foundation (NRF). Priority areas include semiconductors, AI, quantum, clean energy, and life sciences. IIT and IISc will serve as prime anchors with 50 new research parks in Tier-2 cities.

Union Budget 2026-27 introduced the Aatmanirbhar Defence Production Mission, mandating 75% indigenisation of defence procurement by 2030 through the Defence Acquisition Procedure. ₹1.72 lakh crore allocated to defence (excluding pensions), of which 25% is earmarked for domestic R&D. iDEX (Innovations for Defence Excellence) startups receive a ₹1,000 crore innovation fund.

The Union Budget 2026-27 created a Green Transition Fund (GTF) of ₹50,000 crore to finance coastal resilience, extreme weather adaptation in vulnerable districts, and climate-smart agriculture. The fund will co-finance projects identified under India's Long-Term Low Emission Development Strategy (LT-LEDS) submitted to UNFCCC. A Carbon Credit Market under the BEE's Energy Conservation Act 2022 amendment will be operationalised by June 2026.

The Union Budget 2026-27 announced Phase II of Pradhan Mantri Awas Yojana (Urban) 2.0, targeting 1 crore additional affordable urban houses with an outlay of ₹2.3 lakh crore, including central assistance of ₹1.03 lakh crore. The revised scheme introduces a Rental Housing Index and provides interest subsidy up to 4% for EWS and LIG categories under a revamped Credit Linked Subsidy Scheme (CLSS).

The Union Budget 2026-27 allocated ₹6,900 crore for the North East Special Infrastructure Development Scheme (NESIDS), focusing on road connectivity, optical fibre network extension, and food processing clusters in the 8 North Eastern States. Special provisions include 90% central funding for tribal-majority districts and a new North East Startup Accelerator aligned with the Act East Policy.

India signed a USD 30 billion Flexible Credit Line (FCL) agreement with the International Monetary Fund — the largest ever FCL extended to a non-Latin American economy. The FCL, available for up to 5 years, serves as a precautionary reserve against global financial contagion and exchange rate volatility. India's fiscal fundamentals (low external debt at 18.7% of GDP) qualified it for the FCL criteria.

The President of India gave assent to the Competition (Amendment) Act, 2026, introducing Digital Market Regulations under the Competition Act, 2002. The amendment targets Systemically Significant Digital Enterprises (SSDEs), mandating interoperability, data portability, anti-self-preferencing rules, and pre-merger notification for digital deals exceeding ₹2,000 crore in transaction value. The Competition Commission of India (CCI) is empowered to impose structural remedies.

The Appointments Committee of the Cabinet reappointed Prof. Ajay Kumar Sood as the Principal Scientific Adviser (PSA) to the Government of India for a second term. Prof. Sood, a renowned condensed matter physicist and Fellow of the Royal Society, has overseen the operationalisation of the National Research Foundation and the PM YUVA (Young Upcoming Innovators) Scheme during his first term.

The National Skill Development Corporation (NSDC) reported that 5 crore youth have been skilled or up-skilled under the Skill India Mission since 2015, across 40 sector skill councils. The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 covered 1.2 crore beneficiaries in 2025-26, with a focus on Industry 4.0 trades including AI, drone operation, and green energy technician. Placement rate improved to 68% versus 52% in PMKVY 3.0.