The Union Budget 2026–27 reinforces the capital goods sector as a key driver of India’s investment-led growth by increasing public capital expenditure to ₹12.2 lakh crore and introducing targeted measures to strengthen domestic manufacturing capacity. Key initiatives include a ₹10,000 crore container manufacturing scheme, establishment of Hi-Tech Tool Rooms, support for construction and infrastructure equipment, tax incentives for toll and electronics manufacturing, and customs duty exemptions for energy storage and critical mineral processing. Along with ongoing programmes such as Make in India, PLI and the Capital Goods Competitiveness Scheme, these measures aim to enhance technological capability, reduce import dependence and position India as a globally competitive manufacturing hub.
Click to View MoreThe Union Budget 2026–27 stresses “Green Growth” with allocations for CCUS, PM Surya Ghar solar, and nuclear energy, linking climate strategy to EU CBAM pressures and industrial decarbonization; however, funding remains below Net Zero 2070 needs, demanding blended finance and stronger green procurement to close the intent–outcome gap.
Click to View MoreBudget 2026–27 exposes strains in India’s fiscal federalism as the Centre retains policy control while shifting welfare costs to States through unfunded mandates and CSS changes. Non-shareable cesses shrink States’ revenues, social spending stagnates, and a capex-first approach sidelines human capital, prompting calls to rationalise cesses and revive cooperative federalism.
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