The second phase will focus on producing equipment and materials, developing full-stack Indian intellectual property, and enhancing the semiconductor ecosystem. Sitharaman also highlighted plans for industry-led research and training centres to develop advanced technology and a skilled workforce
Nirmala Sitharaman presents ninth consecutive Budget. PIC/PTI
Finance Minister Nirmala Sitharaman on Sunday announced a boost to domestic manufacturing under Make in India by raising the outlay for electronics component production to Rs 40,000 crore and launching the India Semiconductor Mission (ISM) 2.0. The move aims to strengthen local production, innovation, and supply chains.
Building on the success of ISM 1.0, the second phase will focus on producing equipment and materials, developing full-stack Indian intellectual property, and enhancing the semiconductor ecosystem, news agency IANS reported. Sitharaman also highlighted plans for industry-led research and training centres to develop advanced technology and a skilled workforce. The Electronics Components Manufacturing Scheme, launched in April 2025 with an initial outlay of Rs 22,999 crore, has already attracted investments exceeding twice its target.
The Union Budget 2026-27 also proposes a dedicated Rs 10,000 crore SME growth fund to generate future employment and incentivise enterprises based on specific criteria.
For the labour-intensive textile sector, Sitharaman introduced an integrated programme with five key components. The National Fibre Scheme aims for self-reliance in natural fibres such as silk, wool, and jute, as well as man-made and industrial-age fibres. The Textile Expansion and Employment Scheme will modernise traditional clusters through capital support for machinery, technology upgrades, and common testing and certification centres. The National Handloom and Handicraft Programme (NHHP) seeks to integrate and strengthen existing schemes while providing targeted support to weavers and artisans.
Union Budget 2026: Support for mineral-rich states to establish rare-earth corridors
The Finance Minister also announced support for mineral-rich states—Odisha, Kerala, Andhra Pradesh, and Tamil Nadu—to establish dedicated rare-earth corridors, complementing a scheme for rare-earth permanent magnets launched in November 2025.
On the financial sector, Sitharaman proposed setting up a high-level committee on Banking for Viksit Bharat to review the entire banking system, ensuring financial stability, inclusion, and consumer protection. She said Indian banks are now strong, with healthy balance sheets, high profitability, and improved asset quality, ready for the next phase of economic growth.
The government plans to restructure public sector NBFCs into larger, stronger entities such as Power Finance Corporation and REC Ltd. To attract foreign investors, rules on non-debt investments under foreign exchange laws will be reviewed to make them more modern and user-friendly. Additionally, the corporate bond market will be strengthened through a market-making framework, access to funds and derivatives on corporate bond indices, and introduction of total return swaps on corporate bonds.
(With IANS inputs)
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