Budget 2026: Govt will maintain reform momentum to achieve developed-nation goal, says FM

Finance minister Nirmala Sitharaman said in her Union Budget speech on Sunday that the government would maintain its reform momentum to support India’s economic ascent to a developed nation.

Sitharaman told Parliament that India would continue to take confident steps towards Vikasit Bharat, balancing ambition with inclusion. As a growing economy with expanding trade and capital needs, India must also remain deeply integrated with global markets, exporting more and attracting more stable long-term investment. “Our aim is to transform aspiration into achievement and potential into performance,” the minister said.

She added that the government has pursued far-reaching fiscal reforms and fiscal stability, and that its focus is on delivering prosperity to the poor and underprivileged.

The minister said that to accelerate and sustain economic growth, the government would take steps in six areas, including scaling up manufacturing capabilities in seven strategic and frontier sectors, and rejuvenating legacy industrial sectors.

Sitharaman said the government had a duty to accelerate and sustain economic growth by enhancing productivity and competitiveness and building resilience to volatile global dynamics. Its second duty was to fulfill people's aspirations and build their capacity, making them strong partners in India’s path to prosperity, Sitharaman said. “A third duty of the government is to ensure inclusive growth—sabka sath, sabka vikas."

“This requires a supportive ecosystem and maintaining the momentum of structural reforms – continuous, adaptive and forward-looking. Second, a robust and resilient financial sector is central to mobilising savings, allocating capital efficiently and managing risks. AI applications can act as a force multiplier for effective governance," the minister said.

Slew of reforms

The reform drive — which follows significant steps such as income tax and GST cuts, opening up the nuclear power sector, allowing full foreign ownership in insurance, putting on hold the indiscriminate quality control orders that affect industry, and the ongoing labour and bankruptcy reforms — aims to help the economy unlock its unrealized potential and become an advanced economy.

The Economic Survey 2025-26, presented in Parliament on Thursday, upgraded India’s potential growth rate over the medium term to 7% from the 6.5% it had estimated three years ago. The survey projected India’s economy would grow in at 6.8-7.2% in FY27, following 7.4% growth projected for the current year in the statistics ministry’s first advance estimate.

Sitharaman said the government had rolled out more than 350 reform measures, and that it was working with states to reduce compliance requirements. “The reform express is well on its way and will maintain its momentum to help us fulfil our kartavya (duty),” the FM said.

On 31 December, Mint reported that Budget FY27 would include more reforms aimed at deregulating industries, adding muscle to the slew of reforms initiated in FY26.