Kathmandu. Prime Minister Narendra Modi’s government on Sunday presented its annual budget in Parliament with a focus on sustaining the country’s economic growth despite volatile financial markets and trade uncertainties.

Finance Minister Nirmala Sitharaman, while presenting the budget, said that the government plans to increase investment in infrastructure and domestic production while remaining on fiscal prudence. The budget for the 2026-27 fiscal year, which begins in April, comes at a time when high interest rates, geopolitical tensions and new protectionist policies in the world’s largest economies have affected trade and capital flows.

According to the Economic Survey of the Ministry of Finance, India’s economy is expected to grow by 6.8-7.2 percent in the next financial year. The government has set a target to contain the Gross Domestic Product (GDP) deficit to 4.3 percent while maintaining fiscal consolidation. This is slightly lower than the deficit of 4.4 percent in the current fiscal year.

Sitharaman said New Delhi has not offered any popular gifts, saying it would focus on building resilience at home while strengthening itself in global supply chains. “India will move towards a developed India by balancing ambition with inclusion,” he said. The focus will be on structural reforms in the construction sector and increased investment in industries such as biopharma and artificial intelligence (AI).

For the next fiscal year, the government aims to increase capital expenditure mainly on infrastructure to 122 trillion rupees ($133 billion). It was Rs 112 trillion last year. The government plans to increase investment in seven strategic sectors, including biopharma, semiconductors, electronics components and rare earth magnets, to increase production and create jobs. Three chemical production parks will be set up to reduce dependence on imports.

The budget has also announced additional credit support and a growth fund for Micro, Small and Medium Enterprises. Measures have been proposed to deepen financial markets, strengthen corporate bond markets and ease regulations for foreign investors.

Sitharaman said the government plans to construct seven high-speed rail corridors and bring 20 new waterways into operation in the next five years. A dedicated freight corridor for rare earth minerals will also be set up to promote mining, processing, research and production. In addition, sustainable hill and coastal trails will be developed to promote ecotourism.