New Delhi, Feb 1 (NationPress) During her budget address, Finance Minister Nirmala Sitharaman presented strategies to sustain India's economic momentum despite global uncertainties, with the Narendra Modi administration allocating new resources for manufacturing growth, semiconductor production, infrastructure enhancements, and incentives for data centre development.

The Finance Minister announced a 9% increase in capital expenditure, aiming for Rs 12.2 lakh crore in 2026-27, marking one of the largest allocations in recent history, equivalent to 4.4% of GDP.

“For 2026-27, I propose to elevate public capex to Rs 12.2 lakh crores,” Sitharaman stated, emphasizing that this initiative is designed to drive infrastructure-led growth capable of sustaining annual growth rates above 7%. This figure reflects a significant increase from the Rs 2 lakh crore level seen in 2014-15.

Defence received a substantial allocation of Rs 7.85 lakh crore, including Rs 2.31 lakh crore for capital expenditure—a 21.84% increase aimed at modernizing equipment, enhancing aircraft and naval capabilities, and fostering self-reliance under the “Aatmanirbhar Bharat” initiative amidst ongoing border tensions.

The budget for the Electronics Components Manufacturing Scheme saw a twofold increase to Rs 40,000 crore, aimed at supporting current investment trends. The Biopharma SHAKTI programme received Rs 10,000 crore over five years to position India as a preeminent global biopharmaceutical hub.

An additional Rs 20,000 crore was allocated for Carbon Capture, Utilization and Storage technologies to promote cleaner industrial operations. A new initiative, with Rs 10,000 crore earmarked for container manufacturing, aims to enhance logistics competitiveness.

The Railways sector is set to benefit from a capital outlay of Rs 2.77 lakh crore, which includes plans for seven high-speed passenger corridors.

The Ministry of Home Affairs received Rs 2.55 lakh crore to strengthen internal security and law enforcement.

States are guaranteed Rs 1.4 lakh crore via Finance Commission grants while maintaining 41% of tax devolution.

The Finance Ministry secured the largest share at Rs 19.72 lakh crore, primarily to address interest obligations, subsidies, and state transfers. Strategic and manufacturing sectors witnessed significant budget increases.

Sitharaman expressed support for mineral-rich states, stating, “We now propose to assist the mineral-rich states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu in creating dedicated rare-earth corridors.” Micro, small, and medium enterprises will benefit from a new Rs 10,000 crore SME Growth Fund, along with an additional Rs 4,000 crore infusion into the Self-Reliant India Fund.

“These allocations signify the government’s commitment to prioritize the poor, underprivileged, and disadvantaged, all while maintaining economic momentum,” remarked the Finance Minister.

She highlighted six critical growth drivers: expanding manufacturing capacity, revitalizing traditional industries, empowering MSMEs, accelerating infrastructure, ensuring energy security, and developing urban economic zones.

The proposals align with the long-term Viksit Bharat 2047 vision, emphasizing job creation, skill enhancement, and building resilience against external shocks.

The total budgeted expenditure is pegged at Rs 53.47 lakh crore, with a fiscal deficit target of 4.3% of GDP, an improvement over the revised estimate of 4.4% for 2025-26. This reflects ongoing fiscal discipline while facilitating accelerated growth.

Prime Minister Narendra Modi aims for developed-nation status by 2047, necessitating sustained annual growth rates of 7–8%, a trajectory supported by the latest Economic Survey's forecast of 7.4% for the current year and the IMF projections of 7.3% in 2025 and 6.4% in 2026.

The debt-to-GDP ratio is expected to decline from 56.1% to 55.6% next year, with a long-term goal of around 50% within five years.