Union Budget 2026: Highlights and Key Announcements

New Delhi, Feb 1, 2026: Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Union Budget 2026-27 in the parliament today. The highlights of the budget are as follows:

The first Budget prepared in Kartavya Bhawan, is inspired by 3 kartavyas:

• First kartavya is to accelerate and sustain economic growth, by enhancing productivity and competitiveness, and building resilience to volatile global dynamics.
• Second kartavya is to fulfil aspirations of  people and build their capacity, making them strong partners in India’s path to prosperity
• Third kartavya, aligned with vision of Sabka Sath, Sabka Vikas, is to ensure that every family, community, region and sector has access to resources, amenities and opportunities for meaningful participation.

Budget Estimates

• The non-debt receipts and the total expenditure are estimated as ₹36.5 lakh crore and ₹53.5 lakh crore respectively. The Centre’s net tax receipts are estimated at ₹28.7 lakh crore.
• The gross market borrowings are estimated at ₹17.2 lakh crore and the net market borrowings from dated securities are estimated at ₹11.7 lakh crore.
• The Revised Estimates of the non-debt receipts are ₹34 lakh crore of which the Centre’s net tax receipts are ₹26.7 lakh crore.
• The Revised Estimate of the total expenditure is ₹49.6 lakh crore, of which the capital expenditure is about ₹11 lakh crore.
• The fiscal deficit in BE 2026-27 is estimated to be 4.3 percent of GDP.
• In RE 2025-26, the fiscal deficit has been estimated at par with BE of 2025-26 at 4.4 percent of GDP.
• The debt-to-GDP ratio is estimated to be 55.6 percent of GDP in BE 2026-27, compared to 56.1 percent of GDP in RE 2025-26.

Key Union Budget Announcements

- Scaling up manufacturing in seven sectors: BioPharma Shakti (Biologic Medicines)

• Manufacturing scale up
• Industrial sector
• MSME
• Infra push
• Long term stability
• Economic region development
• Bio pharma development

- 10,000 cr outlay in next five years for biologics and biosimilars
- 3 new national institute for bio pharma (existing 7)
- Semi-conductor mission- ISM Lauch 2.0 to support supply chains and research- INR 40,000cr outlay
- Focus on making Indian IP, supply chain ease
- 3 dedicated chemical parks proposed
- Scheme for REMs launched - helps in mining, research and design of REMs.
- Focus on enhancement for Construction equipment
- Bio Pharma Shakti- Rs 10000 cr allocation  spent  over the next five years to build ecosystem for biologics and biosimilars - Key Biosimilar players in India to watch for- Biocon, DRL, Intas (not listed), Zydus and Lupin.
- Container Manufacturing – 10000cr outlay over 5 years
- Textiles : Propose to set up mega textile parks with focus on technical textile
- Initiative to promote sports goods - India has potential to emerge as sports good hub
- Capital goods - Hi tech tool rooms to be established at 2 Locations by PSUs
- MSMEs- Equity support INR 10,000 cr SME growth fund - Will support micro enterprise with 2000cr fund
- CGTMSE Invoice discounting through TREDS platform
- Focus on developing infrastructure in cities with over 5 lakh population
-- Propose Infrastructure Risk Development Fund to provide partial guarantee to lenders
- Propose to establish new freight corridor
- FY26-27 Capex allocation 12.2 lakh cr
- Ship repair ecosystem will be set up in Varanasi & patna
- To recycle PSU real estate assets via special REITs
- Incentives to indigenize manufacturing of sea planes
- Focus on tier1&2 cities, to further amplify city economics, temple towns. Announce 5000cr per CER over 5 years is proposed
- 7 high speed rail corridors
- Incentivize and support for carbon capture and storage technology
- Propose a high level committee on banking for Vikshit Bharat
- Financial Sector- High level committee for Banking for Vikisit Bharat to review the banking sector 
- PFC and REC to be restructured
- Propose to introduce a market maker framework for bond market
- Corporate bond market: total return swaps on corporate bonds
- Propose incentive of 1000cr for single bond issuance of more than 1000cr (current scheme under amrit is upto 200cr will also continue to support in mid and long term)
- Services sector-core sector for Viksit Bharat
- Hubs for medical value tourism - 5 regional medical hubs - private sector partnership
- Investment in Indian equities overall hike for PROI from 10% to 24%
- Ayush centres - infrastructure for diagnostics
- Focus on optometry, anaesthesia, applied psychiatry
- Ayurveda gained acceptance since covid
- Five regional medical hubs to be set up. AUSH and Yoga center will be in focus. Key companies to watch : Jeena Sikho Life and Vaidya Sane Labs
- Medical tourism to be encouraged, positive for hospitals in metros
- Propose to, 1. 3 all India centres for ayurveda , 2. evidence based research
- Propose loan-linked subsidy support for veterinary colleges
- Focus on astrophysics and astronomy - upgradation for telescope, and planetariums
- National institute of hospitality for tourism sector. 
- Ecologgically sustainable mountain treks in Himachal, Uttarakhand, western ghats.
- Bird watching traits in Odisha, AP and TN. 
- Khelo India mission to transform sports over next decade. 
- Support in Animal Husbandry
- For Increasing farmer income, high value crops to be supported
- Major focus on coconut planting, cashew to enhance exports
- Promote on cultivation of Sandalwood
- Establishing rare earth corridors in 4 states - Odisha, Kerala, AP and TN
- Lakhpati didi scheme
- Bharat Vistar-multilingual AI tool to be launched to enhance farm productivity and support farmers knowledge
- Plan To Operationalise 20 New National Waterways Over 5 Years

• The government plans to operationalise 20 new National waterways over the next five years. Training institutes will be set up as regional institutes of excellence in waterways space
• Ship repair ecosystem catering to inland waterways will be set up in Varanasi and Patna
• The government also plans to launch a coastal cargo scheme to increase the share of coastal shipping and inland waterways
• To enhance last-mile, remote connectivity to give support to the manufacturing of seaplanes

- Focus on development on 4000 e-buses in eastern India, target to boost pilgrim and tourism 
- INR 1.4lakh cr provided to states as Finance commission grant 
- Fiscal consolidation- Central Govt Debt to GDP-55% of GDP currently  
- Fiscal deficit- FY26 estimated 4.4% 
- FY27-4.3% of GDP fiscal deficit  
- Borrowings estimated at INR 11.7trn FY27
- Income tax act will come into effect from 01-Apr-2026. 
- Any interest awarded from motor insurance will be exempted from income tax.
- Almost 99% capex fund utilisation in fy25-26 (utilised INR 11 lakh cr vs budgeted amount of INR 11.2 lakh cr)
- To reduce TCS for pursuing medical and education from 5% to 2%
- Tax holiday for Data center services companies till 2047
- Increase safe harbour limit to 2000cr from 300cr for IT services. 
- Tax holiday till 2047 for any IT services company that provide services to domestic customers. 
- STT on futures and options raised - Futures raised to 0.05% from 0.02%, options from 0.1% to 0.3%.
- Capital gains tax on buyback of shares
- Basic custom duties on soda glass. 
- Upliftment of Nuclear power plants till 2035
- Removal of basic custom duty for manufacture of parts required in Aircrafts. 
- Buybacks to be taxed as capital gains across all shareholders categories 
- Goods imported for personal use reduced from 20% to 10%
- Exempt custom duties on 17 drugs used in curing cancer
- Exempted custom duties for capital goods used for manufacturing of lithium ion cells for BESS
- Free duty on fishes by Indian fisherman using Indian vassals

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