India Budget 2026-27: What HR and business leaders need to know

• The Budget targets economic growth through strategic manufacturing, infrastructure, and SME support, while aiming to promote competitiveness and resilience.
• Significant investment in human capital, skills development, and services sectors aims to empower youth, healthcare professionals, and creative industries.
• Total expenditure is expected to reach Rp53.5 lakh crore, with non-debt receipts estimated at Rp36.5 lakh crore.

India's Finance Minister Nirmala Sitharaman presented the Union Budget 2026‑27 on 1 February (Sunday), setting out a roadmap to sustain strong economic growth, enhance domestic manufacturing, expand infrastructure, and boost job creation.

The proposals and provisions are framed around three kartavyas – or responsibilities – of the Government, two of which focus on accelerating economic growth and building the capacity of India’s people, with some of the key updates highlighted below.

Accelerating and sustaining economic growth 

The first kartavya focuses on enhancing productivity, competitiveness, and resilience amid volatile global dynamics. To achieve this, the Budget proposes interventions across manufacturing, MSMEs, infrastructure, energy, and urban development. Programmes such as Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation) – proposed to boost biologics in India, aim to position India as a global hub for biologics and biosimilars, with Rp10,000 crore allocated over five years to develop domestic production and research capabilities.

Similarly, the India Semiconductor Mission 2.0 will expand domestic chip production, strengthen supply chains, and develop a skilled technology workforce, reflecting a clear alignment between economic growth and talent creation.

The Government is also scaling up electronics, chemical, and capital goods manufacturing, supporting rare earth minerals and container production, and modernising traditional industrial sectors. In the Budget reading, Minister Sitharaman noted special attention being paid to textiles, with initiatives such as integrated skill development programmes, Mega Textile Parks, and the Mahatma Gandhi Gram Swaraj initiative to support handloom, handicraft, and khadi production.

In parallel, a dedicated SME Growth Fund of Rp10,000 crore, along with liquidity and professional support measures, aims to create 'Champion MSMEs' and strengthen micro-enterprises. Infrastructure investment remains a key pillar, with public capital expenditure projected at Rp12.2 lakh crore, alongside new freight corridors, inland waterways, seaplane schemes, and city economic regions to stimulate urban growth.

Building the capacity of India's people

The second kartavya addresses the aspirations of India’s people and seeks to build their capacity, ensuring citizens are active partners in the country’s growth journey. The Budget proposes a renewed emphasis on the services sector and human capital development, with a "High-Powered 'Education to Employment and Enterprise' Standing Committee" to recommend sector-specific measures for growth, employment, and exports.

Health and allied care, ancient medicine (AYUSH), animal husbandry, and creative sectors such as AVGC (Animation, visual effects, gaming, and comics) have also been identified as priority areas. Under the new Budget, close to 100,000 allied health professionals will be trained over five years, and multiskilled caregivers will be developed to meet the growing demand for geriatric and wellness services. Regional medical hubs and medical tourism initiatives also aim to create diverse job opportunities for healthcare professionals.

Skill development and education form another core focus, with proposals for new university townships, STEM-supportive facilities for girls, and design institutions to meet expanding talent needs. Tourism, heritage, sports, and cultural initiatives, including the Khelo India Mission and development of archeological and trekking sites, are designed to generate employment, foster entrepreneurship, and unlock local economic potential.

Additionally, specialised programmes for rural women-led enterprises, Divyangjan (persons with disabilities), and marginalised groups ensure inclusive access to skills, technology, and livelihood opportunities.

Industry comments

Commenting on the Budget, Srinivas Nandigam, Managing Director – Global Capability Centre, Advance Auto Parts India, said it reinforces India’s commitment to building a strong and future-ready talent ecosystem. He highlighted that clear policies around taxation for skilled global professionals could encourage longer-term participation, enabling deeper expertise, leadership continuity, and knowledge exchange within the workforce.

He added: "The focus on emerging technologies and AI, along with structured evaluation of their impact on jobs, supports more aligned talent development for evolving industry needs.

"Together, these measures strengthen India’s ability to nurture high quality talent and advance its role as a global services leader on the path to 2047."

Meanwhile, Rajesh Mehra, Promoter & Director, Jaquar Group, said that the push to scale manufacturing across seven strategic and frontier sectors, coupled with sustained investments in industrial corridors, logistics, and workforce upskilling, would deepen domestic value creation and enhance productivity across the industrial ecosystem.

The leader shared further: "As India advances towards Viksit Bharat, the Budget takes a decisive step in promoting design-led, technology-driven and value-added manufacturing, while pragmatically acknowledging the need for deep integration with global supply chains.

"For manufacturing-intensive sectors such as bath and lighting, where precision, quality, sustainability and scale are critical, the focus on technology adoption and the development of Tier 2 and Tier 3 cities as integrated manufacturing hubs will unlock fresh demand, create skilled employment, and drive regional industrialisation."

Last, Dr. Vikram Kumar, Founder & Managing Director, SRV Media, pointed out that initiatives such as university townships, regional medical hubs, content creator labs, and design institutes demonstrate a clear focus on future skills and employability. According to Kumar, for brands and institutions, this marks a shift from transactional communication to purpose-led narratives rooted in impact and innovation.

He further suggested that as policy enables new talent pipelines and digital-first learning, strategic communication will be critical for building credibility, attracting stakeholders, and translating policy vision into measurable public trust and growth.

The Union Budget 2026‑27 proposes a total expenditure of Rp53.5 lakh crore, with non-debt receipts estimated at Rp36.5 lakh crore and net tax receipts at Rp28.7 lakh crore. Net market borrowings are projected at Rp11.7 lakh crore, complemented by small savings and other sources.

Photo / Screenshot of post-Budget press conference, India Budget website