Public Capital Expenditure: Increased to ₹12.2 lakh crore to spur infrastructure growth.
Manufacturing Capacity Enhancement: Establishment of Hi-Tech Tool Rooms for high-precision manufacturing.
Container Manufacturing Scheme: ₹10,000 crore scheme to create a competitive ecosystem.
Support for Toll and Electronics Manufacturing: Five-year income tax exemption for non-resident entities.
Energy Transition: Customs duty exemptions on capital goods for lithium-ion cells and critical minerals.
Capital Goods Definition: Includes machinery and equipment for production and services.
High Economic Multiplier Effect: Public expenditure generates spillover effects of 2.5 to 3.5 times.
Foundation of Manufacturing: Backbone for sectors like automobiles and electronics.
Catalyst for Technological Upgradation: Promotes advanced technologies in industries.
Strategic Role: Vital for renewable energy systems and electric vehicles.
Employment Engine: Generates significant employment in technical trades.
Challenges: Inverted duty structure and high logistics costs hinder competitiveness.
Measures Required: Expansion of Hi-Tech Tool Rooms and promotion of indigenous machinery.
Conclusion: The budget solidifies the sector's role in India's growth strategy.

Union Budget 2026-27 Enhancements for the Capital Goods Sector

Key Points