The Centre has been reducing customs duties and the number of tariff rates, as well as simplifying airport processes, Sitharaman said. Budget FY27 sought to reform customs processes, rationalize customs duty including for aircraft engines and parts, exempt import duty for goods for nuclear power projects and exempt duty on capital goods for making lithium-ion cells. It also eased passenger baggage rules.
“All that has been done till now. We’ll still have some more work done, which I couldn’t bring in this time. It could be for scanning of the goods which come—Can it be completely mechanized? Can it be devoid of human interface?,” the minister said.
The defence sector is witnessing significant investment interest for domestic requirements and exports, Sitharaman said. The FY27 budget has allocated ₹7.85 trillion to the defence ministry, the highest among all ministries. There is a huge investor interest in the sector not only for domestic requirements, but also for exporting from India, she said, adding the success of India-made equipment, artillery and ammunition have made investments attractive. “People are willing to come and partner with Indian companies,” the minister said.
Responding to a question on narrowing the per-capita income gap with advanced economies, the minister referred to multiple budget proposals aimed at job creation, youth skilling and encouraging entrepreneurial spirit, setting up medical hubs and building rare earth corridors.
“When we say we are going to set up medical hubs in the country, every radiologist, anaesthetist and paramedic of any kind are all going to have opportunities there,” Sitharaman said, adding a permanent committee will advise the government on continuously improving course content, making sure it is fit for industry, and making the youth employment-ready.
The Budget proposed a standing committee on education, employment and enterprise to recommend measures that focus on the services sector as a core growth driver. The idea is to make India a global leader in services, with a 10% global share by 2047.
“When we say rare earth corridors are going to be established, are they going to be established without any human interface? Are people not going to invest in extracting the mineral? Are they not going to be manned by people? When we say we are going to improve animal husbandry in rural areas, we will have more veterinary doctors and more testing labs for animal and livestock care, are these not going to be done by human beings?”
The Budget proposed four rare-earth mineral corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. Though India has one of the world’s largest rare-earth deposits of about 6.9 million tonnes, China controls about 60% of the world’s rare earth mining and about 90% of its processing capacity.
On states’ repeated demand to fold central cesses and surcharges into the tax pool available to states as well, the minister said these levies are Centre’s constitutional rights and cannot be undermined.
Sitharaman explained that a component within Centre’s capex of ₹12.21 trillion, meant to support states’ capital investments, will incentivize reforms at the state level. Reforms at state level and states’ investment appeal are a priority for the Centre.
Launched in FY21 with a modest ₹12,000 crore to support states after the pandemic, Sasci (Special Assistance to States for Capital Investment) has grown to become a central pillar of India’s public investment push.
Sitharaman explained that the government has completed two pilot programmes of the PM internship scheme meant to give corporate exposure to the youth. “We’ve some lessons from it. Now, we are going to the cabinet for the final approval so that the entire programme will be launched.”
The Centre expects states to come up with proposals for funding the development of cities as growth engines. The budget scheme offers a funding of ₹5,000 crore per city. Projects will be selected on a challenge mode, based on scrutiny of proposals. “I am not sitting here and naming the state. It’s for the states to rise up and ask for it,” she said.
Sitharaman explained the rationale behind the revamp of the Mahatma Gandhi National Rural Employment Guarantee scheme as the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission.
“MGNREGA has gone through a serious challenge of efficiency. No wonder we came up with a cleaned-up framework involving both the Centre and states. I have heard ministers tell me that in some of the states, more than 80-year old people have enrolled in NREGA. Even nearly completely urbanized states, speaking loudly about their contribution to GDP, witnessing their MGNREGA rolls going up every year.”
The government has allocated a combined nearly ₹1.26 trillion in the Union Budget 2026–27 for the new and existing rural jobs guarantee schemes. Of this, ₹95,692 crore has been earmarked for the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin (VB-G RAM G) scheme, while the government has set aside ₹30,000 crore for the outgoing Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Mint reported on 21 January that the government was eyeing dual allocations for the two schemes and the Centre’s allocation under VB-G RAM G would be around ₹95,600 crore.