Where Budget 2025 was largely dominated by the income-tax rate and slab relaxations, Budget 2026 has done away with Big Bang measures. Instead, its scattershot approach, through various sectoral and issue-based measures, when taken together, is aimed at propelling India’s growth over the medium term. Given the level of geoeconomic and geopolitical uncertainties that the Indian economy faces, this diffused approach is likely a more effective policy than targeted Big Bang announcements would be. This is not the time for further disruption. Budget 2026 contains announcements for the manufacturing sector, various services sectors, as well as particular provisions to help labour-intensive sectors such as textiles and leather. In terms of manufacturing, the Budget includes measures covering seven well thought-out areas: biopharma, semiconductors, electronics, rare earths, chemicals, capital goods and textiles. Semiconductor and electronics manufacturing are the few sectors that have gained from the government’s existing PLI schemes. The India Semiconductor Mission 2.0 and the increased allocation under the Electronics Component Manufacturing Scheme are appropriate follow-ups to this. These are sectors where India needs to become globally competitive. The Biopharma SHAKTI scheme is aimed at making India a global biopharma manufacturing hub with an allocation of ₹10,000 crore over the next five years. Pharmaceuticals, already a sector that India does well in, are exempt from the U.S.’s 50% tariffs. It is also important to support those sectors that are currently hit by those same tariffs. The National Export Promotion Mission announced in the last Budget was implemented only by December 2025, nine months into the financial year. The Centre should ensure that this Budget’s integrated programme for the textiles sector does not face similar delays. Also, the various measures aimed at creating ‘Champion MSMEs’, providing them equity, liquidity, and professional support, must be implemented quickly. MSMEs account for 48.6% of India’s exports, and the EU FTA, even if it is implemented soon, will not kick in quick enough to offset the ongoing pain caused by the U.S. tariffs. The services sector, too, stands to benefit from Budget 2026. The high-powered ‘education to employment and enterprise’ standing committee, announced by the Finance Minister, should get off the ground soon. The focus on health care and medical tourism, where India is already developing strengths, is a good start. In keeping with the Budget’s multipronged approach, the Centre has sought to cater to the election-bound States this year through several smaller announcements — such as dedicated rare earth corridors to benefit Odisha, Kerala, Andhra Pradesh and Tamil Nadu, a Coconut Promotion Scheme for Kerala, an integrated East Coast Industrial Corridor for West Bengal, and the first of the new national waterways to begin in Odisha — rather than through the consolidated packages of the past.

As for the Centre’s finances, Budget 2026 offers a mix of expenditure enthusiasm and revenue sobriety. The capital expenditure push, especially with regard to infrastructure creation, has continued, perhaps in reaction to the realisation that current conditions do not encourage private investment. Overall, capital expenditure is set to grow to ₹12.2 lakh crore in 2026-27, amounting to 4.4% of GDP, the highest in at least the last 10 years. This includes the announcement of dedicated freight corridors and training institutes for the manpower needed. These rail corridors are also to be supplemented by a Coastal Cargo Promotion Scheme to incentivise increasing the share of inland waterways and coastal shipping. It is noteworthy that the Centre has revised downwards its capital expenditure for 2025-26 to ₹10.9 lakh crore from the ₹11.2 lakh crore initially budgeted. It remains to be seen if this year’s target will be met, but even coming close will provide a substantial fillip to the economy. On the revenue front, the Centre did not announce any major tax cuts for individuals or corporations. In 2019 and 2025, respectively, corporations and individuals received substantial tax relief. To announce more would have put undue stress on central finances at a time when its expenditure commitments — known and anticipated — are substantial. However, while direct taxes have largely received procedural improvements, the Budget has included a slew of indirect tax relaxations for the promotion of marine, leather and textile products exports, and speeding up India’s energy transition. The tax revenue projections are largely sober. Corporate tax revenue is projected to grow nearly 14% over the Budget estimates of 2025-26. This is broadly in line with the revised estimates for 2025-26 coming in 12.4% higher than the actuals of the previous year. Income-tax revenue has been budgeted to grow 1.9% over the BE of 2025-26 — an expected outcome following last Budget’s substantial rate relaxations. Gross GST revenue has been projected to contract 13.5% in 2026-27, a reflection of the September 2025 rate rationalisation and the end of the Compensation Cess. Taken together, the Centre’s fiscal deficit has been projected at 4.3% of GDP in 2026-27, down from 4.4% estimated for 2025-26. While the Centre’s fiscal consolidation path since the COVID-19 pandemic has been admirable, continued aggression in reducing the deficit deserves some questioning. Even the Economic Survey argued for some fiscal flexibility for the Centre given the geoeconomic and geopolitical conditions. Overall, Budget 2026 may disappoint those looking for massive tax relief or subsidies, but is nevertheless a credible and creditable effort.

The Ministry of Electronics and Information Technology (MeitY) approved 22 new projects under the ₹22,919 crore Electronics Component Manufacturing Scheme (ECMS), under which firms making electronics parts will receive payouts based on incremental production and employment. The projects approved under Friday’s tranche amount to a combined investment of ₹41,863 crore, the IT Ministry said.

Small firms around the country as well as established heavyweights like Tata Electronics Pvt Ltd and Samsung’s display assembly facility in Noida will receive ECMS incentives, IT Minister Ashwini Vaishnaw said. The components include printed circuit boards (PCBs), with nine applicants approved for this category; capacitors, connectors, device enclosures, lithium ion cells, optical transceivers, camera and display sub-assemblies, and anode, a battery component.

The ECMS payouts are likely to be a race, as the government will award incentives to the firms who finish their production roadmap first, incentivising firms to rapidly commence eligible production. The scheme is a key focus in the electronics manufacturing efforts by the Union government, aside from the semiconductor fabrication and assembly facilities that are receiving capital subsidies. 

The units will be in Andhra Pradesh, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh and Rajasthan, the government said in a statement. “These approvals will significantly strengthen domestic supply chains, reduce import dependence for critical electronic components, and support the growth of high-value manufacturing capabilities in India,” the government said in a statement.

IT Minister Ashwini Vaishnaw urged industry players at the announcement event for this tranche to upgrade their business management systems to implement “six sigma,” a challenging set of quality control measures. Mr. Vaishnaw also asked the industry to set up an “integrated” research and development setup for electronics design. 

The government on Monday (November 17, 2025) approved 17 projects entailing about ₹7,172 crore investment across six categories under the Electronics Component Manufacturing Scheme (ECMS), underlining India’s resolve and its decisive push into producing high-value components.

These projects will lead to production worth ₹65,111 crore cumulatively.

“You have shown the way on how India will become major electronics manufacturing hub,” Minister for Electronics and IT, Ashwini Vaishnaw said at an event announcing the second tranche of approvals.

Mr. Vaishnaw said, “To achieve long-term success, India will have to focus on building design teams, ensuring Six Sigma quality standards in all products, and partnering with ‘Swadeshi’ suppliers in projects,” the Minister added, “The Quality systems will be a key part of evaluation process,”

“The way geopolitics and geoeconomics are evolving, the challenges will be bigger and in those challenging periods, your ability to have good supply chain control will define your resilience and ability to compete in difficult times,” Mr. Vaishnaw said.

He also said that a new skilling framework for electronics manufacturing is in the offing. The 17 projects greenlit now in the second tranche, bring total projects under the scheme to 24.

The players included Jabil Circuit India, Aequs Consumer Products, Uno Minda, ASUX Safety Components India, Zetfab India, TE Connectivity India, and Meena Electrotech, among others.

The categories include camera module, connectors, multi-layer PCB, oscillators, enclosures among others and are spread across nine States.