Union Budget 2026 (FY27) Explained Like I’m Your Friend: 12 Key Points That Actually Matter

If you’ve ever felt “Budget is too complicated,” you’re normal.

So here’s my rule: Budget = 3 questions.

1. Where will money go?

2. How will the government fund it?

3. Which sectors get a 2–3 year tailwind?

This year’s Budget (FY 2026-27) is a mix of growth push + manufacturing focus + fiscal discipline. 

1) The 3 Biggest Numbers (save these)

• Capex (infrastructure spending): ₹12.2 lakh crore (record level; ~8.8% higher YoY) 

• Fiscal deficit target: 4.3% of GDP (FY27) 

• Government borrowing (gross): ₹17.2 lakh crore; net: ₹11.7 lakh crore 

Why these 3 matter:

Capex drives projects + demand, deficit sets “stability tone,” and borrowing affects bond yields + interest-rate mood. 

2) What the Budget is “betting on” (simple)

A) Infrastructure stays the growth engine

The government is continuing the infrastructure push with higher capex. 

B) Manufacturing is the main story

Budget focus is clearly on building domestic manufacturing + jobs, especially in strategic sectors. 

3) Big Announcements (easy bullet list)

Here are the highlights people will actually talk about:

• India Semiconductor Mission 2.0: outlay mentioned around ₹40,000 crore (chip ecosystem: equipment/R&D/training). 

• Biopharma SHAKTI: ₹10,000 crore push for biopharma (manufacturing + capability building). 

• SME Growth Fund: ₹10,000 crore (aimed at boosting MSME growth + attracting funding). 

• Carbon/emissions plan: ₹200 billion set aside over five years (as reported). 

• Debt roadmap signal: debt-to-GDP target mentioned at 55.6% (FY27). 

• States’ share: 41% of the common tax pool to states for 2026–2031 (as reported). 

4) Tax & trade moves (what’s practical to know)

Budget documents include measures aimed at easing manufacturing/friction points—like tax exemptions/safe-harbour style provisions linked to bonded zones/tooling/warehousing and some duty-related tweaks for export inputs. 

5) What it means for markets (Nishi’s ultra-easy decode)

If you’re a beginner investor:

• Don’t chase headlines. Budget impact is often theme-based, not instant profit.

• Watch capex + borrowing because that influences rate mood and infra themes. 

If you’re a trader:

• Capex themes: infra, capital goods, rail/urban suppliers (theme strength depends on valuations). 

• Borrowing theme: higher borrowing can keep bond yields sensitive—even if the Reserve Bank of India supports liquidity. 

• Manufacturing missions include semiconductors, biopharma, and MSMEs, which represent a multi-year narrative; however, stock prices are influenced by both execution and expectations. 

6) My “Budget Filter” (so you don’t get trapped)

Before you believe any viral claim, ask:

1. Is money allocated, or just announced?

2. Is it a one-time scheme or 3-year mission?

3. Will it change earnings, or only sentiment?

That’s it. That’s how you stay calm.

This is a news explainer for education only, not investment advice.