Union Budget 2026-27 – Infrastructure & Manufacturing Focus

The Union Budget 2026-27 allocates ₹12.2 trillion for infrastructure, maintaining government capex at 3.4% of GDP. Seven strategic sectors are targeted for focused investment: semiconductors, rare earth magnets, chemicals, pharmaceuticals, textiles, capital goods, and sports goods. The fiscal deficit target is set at 4.3%, down from 4.4% in the previous year.

## Key Highlights

**Infrastructure Allocation:** ₹12.2 trillion (up from ₹11.2 trillion FY25-26)

**Government Capex:** Maintained at 3.4% of GDP

**Strategic Sectors Targeted:**
– Semiconductors
– Rare earth magnets
– Chemicals
– Pharmaceuticals
– Textiles
– Capital goods
– Sports goods

**Fiscal Deficit Target:** 4.3% (down from 4.4%)

## Impact

Sustained demand supports manufacturing expansion across all identified strategic sectors. The budget enables supply chain development for critical industries and generates significant employment across manufacturing regions. Government commitment to infrastructure spending validates long-term manufacturing investments and provides stability for business planning.

**Source:** Ministry of Finance, Al Jazeera