Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026-27 in Parliament, announced the formation of a “High Level Committee on Banking for Viksit Bharat” to undertake a comprehensive review of India’s banking sector and prepare it for the country’s next phase of economic growth. The committee will focus on strengthening financial stability, deepening inclusion, enhancing consumer protection, and ensuring that reforms keep pace with evolving economic demands.
Delivering her record ninth consecutive Budget speech, which lasted around 90 minutes, Sitharaman said the Indian banking system is currently in a strong position. She highlighted that banks today are marked by robust balance sheets, record-high profitability, significantly improved asset quality, and financial services coverage extending to more than 98 per cent of villages across the country.
“At this juncture, we are well placed to take a futuristic view of the reforms required to sustain reform-led growth in the banking sector,” the finance minister said, adding that the proposed committee would evaluate both structural and policy measures to ensure long-term resilience and efficiency.
Alongside banking reforms, Sitharaman outlined major steps for the non-banking financial sector. To achieve scale, boost operational efficiency, and strengthen public sector NBFCs, the government will initiate restructuring of the Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC) as a first step. These two institutions play a crucial role in financing India’s power and infrastructure sectors.
She also unveiled a broader vision for NBFCs under the “Viksit Bharat” framework, setting clear targets for credit expansion and accelerated technology adoption. The aim is to enhance the sector’s role in supporting small businesses, infrastructure development, and last-mile financial access, while maintaining strong regulatory oversight.
In a major move to simplify taxation and boost economic competitiveness, the finance minister announced a series of indirect tax reforms focused primarily on customs duties. These measures are designed to streamline the tariff structure, encourage domestic manufacturing, promote exports, and address long-standing issues related to inverted duty structures where taxes on inputs are higher than on finished goods.
The customs duty relief is expected to benefit several key sectors, reducing costs for manufacturers and improving India’s position in global supply chains. The government’s strategy aligns with its broader “Make in India” and export-led growth objectives, aiming to strengthen domestic production while enhancing international competitiveness.
Sitharaman’s Budget presentation followed the tabling of the Economic Survey of India 2025-26 in Parliament a day earlier. The Economic Survey, a flagship annual document, provides a detailed and data-driven assessment of the economy’s performance over the past year and outlines potential policy directions for the future.
Continuing a long-standing tradition, the survey set the context for the Budget by reviewing major economic trends, sectoral performance, fiscal developments, and global challenges. It noted that despite a volatile international environment marked by geopolitical tensions and economic uncertainties, India has maintained steady growth momentum.
According to the Economic Survey, India’s real GDP growth for the financial year 2026-27 is projected to be in the range of 6.8 to 7.2 per cent. The projection reflects the country’s sustained medium-term growth potential, driven by strong domestic demand, expanding infrastructure investment, and ongoing structural reforms.
The survey also emphasized the importance of financial sector stability and reform in supporting long-term economic expansion. It highlighted improvements in banking sector health, increased digital financial inclusion, and rising credit flow to productive sectors as positive indicators.
Overall, the Union Budget 2026-27 signals a strong focus on strengthening the financial ecosystem, simplifying the tax regime, and positioning India for sustained high growth. With the proposed high-level banking reforms committee, NBFC restructuring, and customs duty rationalisation, the government aims to create a more efficient, resilient, and growth-oriented economic framework under the vision of “Viksit Bharat.”