'Budget or aside, reforms will continue': Highlights from FM Nirmala Sitharaman’s post-Budget interview

India's Finance Minister Nirmala Sitharaman presented the country's Union Budget for the year 2026–27 on February 1, 2026. The budget sets out plans and priorities for the coming year, focusing on building infrastructure, supporting manufacturing industries, and ensuring economic stability. Key highlights of the budget include an increase in government spending on infrastructure and support for small and medium-sized enterprises. The government plans to spend a total of 12.2 trillion rupees, about 133 billion dollars, on capital expenditure during the year. This is an increase from the previous year's spending of 11.2 trillion rupees. The additional investment aims to boost development projects across the country. The budget highlights specific areas for investment, such as biopharma, semiconductors, electronics, and the processing of rare earth materials. These sectors are vital for strengthening domestic industries and reducing reliance on imports. To further promote self-sufficiency, the government will establish three new chemical parks, which are expected to help lower import dependency in chemical production. India’s economy is projected to grow by between 6.8% and 7.2% in the upcoming year. The government attributes this optimistic outlook to strong domestic consumption and ongoing reforms. Alongside growth expectations, the fiscal deficit target has been set at 4.3% of gross domestic product, slightly lower than this year’s 4.4%. This reflects ongoing efforts to maintain fiscal discipline. The budget emphasizes reforms that aim to improve supply chains and provide better support for small and medium enterprises. These reforms are designed to strengthen economic resilience and make it easier for businesses to operate smoothly. Financial markets are also a focus area. The government plans to modernize foreign exchange rules and improve liquidity in corporate bond markets. These reforms aim to attract more foreign investment into the country, making India a more appealing place for investors. Environmental sustainability is another priority. The budget includes plans for seven new high-speed rail corridors and dedicated freight corridors. These projects will improve transportation infrastructure and support environmentally sustainable growth. Overall, the budget aims to strengthen India's economy through stability, innovation, and investment. It seeks to improve productivity and create more jobs across various sectors. In a post-budget interview, the Finance Minister stated that the government will continue its focus on structural reforms to boost productivity and employment. She emphasized that ongoing public capital expenditure will remain a key strategy. For the upcoming fiscal year, the government has allocated 12.2 lakh crore rupees, about 4.4% of GDP, for public investments. Supporting small and medium-sized enterprises is another vital part of the plan. The government will provide equity support, liquidity assistance, and professional help to ensure these businesses do not face shortages of funds. This support aims to keep small firms active and competitive. Regarding revenue, the government has set a disinvestment target of 80,000 crore rupees for the year. The Secretary of the Department of Economic Affairs mentioned plans for a strong asset monetization pipeline to meet this goal, which involves selling some government assets. There is also a focus on financial regulation. The Revenue Secretary clarified that recent proposals to increase Securities Transaction Tax (STT) will apply only to the Futures and Options segment of the markets. This move aims to manage systemic risks within the equity market. The government has announced a new scheme allowing small taxpayers to disclose foreign assets over a period of six months. Additionally, the deadlines for filing income tax returns have been confirmed as July 31 for ITR-1 and ITR-2 forms. Further, a new rule-based automated process will be introduced. This process will enable small taxpayers to easily obtain lower or nil deduction certificates, making tax compliance more straightforward. In summary, India’s Union Budget for 2026–27 underscores the government’s commitment to economic growth, infrastructure development, fiscal responsibility, and reforms. These measures are intended to support India’s goal of becoming more competitive globally, while ensuring sustainable and inclusive growth for its citizens.