The Union Budget 2026-27 picks winners. FM Nirmala Sitharaman framed it around three “kartavya” — growth, human capital, and equitable access. Here are the union budget 2026 highlights that actually matter.
1. India Semiconductor Mission 2.0
The big bet. ISM 2.0 moves beyond chip assembly into equipment manufacturing, materials, and full-stack Indian IP. New industry-led research and training centres will build both technology and talent.
India’s clearest signal yet: it wants to move up the semiconductor value chain, not just assemble at the bottom.
2. Biopharma Gets Rs 10,000 Crore
Biopharma SHAKTI aims to make India a global biopharma manufacturing hub over five years. The plan includes three new NIPERs and upgrades to seven existing institutes, plus a network of 1,000+ accredited clinical trial sites.
India already dominates generic drugs. This is a push into biologics and biosimilars — where the real margins are.
3. MSME Growth Fund: Rs 10,000 Crore
A dedicated SME Growth Fund to create “future champions,” plus Rs 2,000 crore added to the Self-Reliant India Fund for micro enterprises. The MSME sector employs over 100 million people — this is jobs money.
4. Tax Holidays for Cloud and Data Centres
Foreign companies running cloud services globally through Indian data centres get a tax holiday until 2047 — that’s 21 years. Related entities providing data centre services from India get a 15% safe harbour on cost.
This is aggressive. India is directly competing with Singapore and Ireland for cloud infrastructure investment.
Also notable: Minimum Alternate Tax drops from 15% to 14%, and IT services get a unified taxation category with a common safe harbour framework.
5. Capital Expenditure: Rs 12.2 Lakh Crore
Public infrastructure spending rises to Rs 12.2 lakh crore for FY 2026-27 (up from Rs 11.2 lakh crore). Fiscal deficit target: 4.3% of GDP. The Centre is spending big while keeping the deficit trajectory intact — a balancing act that gets harder every year.
The Bottom Line
This budget picks winners: semiconductors, biopharma, data centres, and MSMEs. The tax incentives are designed to attract global companies to build in India, not just sell in India. Whether it works depends on execution — which is where previous missions have stumbled.
Sources: Press Information Bureau, PRS Legislative Research, India Budget