Budget 2026: Mahatma Gandhi Gram Swaraj Initiative announced to boost Khadi production

Finance Minister Nirmala Sitharaman, on Sunday (February 1, 2026), announced the ‘Mahatma Gandhi Gram Swaraj Initiative’ in the Union Budget 2026-27 to strengthen khadi and handicrafts in the country. The initiative will streamline the production and manufacturing of khadi clothes. This will “benefit our weavers and our youth,” said Ms. Sitharaman.

Finance Minister Nirmala Sitharaman was presenting her ninth budget in Parliament. 

Also Read |Union Budget 2026 live

The Union Budget 2026-27 was keenly observed by economic and political experts to gauge the health of the economy in the financial year to come. 

India also marked the death anniversary of Mahatma Gandhi, on January 30, days before the announcement of the Gram Swaraj Initiative. 

In 2025, the Khadi and Village Industries Commission (KVIC) reported a record turnover of ₹1.70 lakh crore for the financial year ending in 2025, and set a target of ₹2 lakh crore for the 2025–26 period. 

Finance Commission Report

The Sixteenth Finance Commission report for 2026-31 was also tabled in the Parliament by Ms. Sitharaman before the presenting of the all-important Budget. 

In November 2025, the Sixteenth Finance Commission, chaired by economist Arvind Panagariya, submitted its report to the President of India, the office of the President.

Apart from deciding on the Centre-States tax division, the 16th FC was also tasked with recommending the principles that should govern the grants-in-aid transferred by the Centre to the States.

Ninth Budget by Nirmala Sitharaman

This is the ninth budget that Finance Minister Nirmala Sitharaman is presenting in the parliament. 2026 is the first year in which the new ‘Kartavya Bhavan’ in New Delhi is being used to present the Union Budget, marking a shift from the Ministry of Finance headquarters from North Block to the newly constructed building. 

The Finance Minister met with Indian President Droupadi Murmu before announcing the Budget. Ms. Murmu fed Ms. Sitharaman the customary ‘dahi-cheeni’ before the latter proceeded to present the financial document.