Budget 2026 Highlights: Big Capex Push, STT Increase And Emphasis On Manufacturing, Tourism And Employment

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The government framed the Budget around three guiding ‘Kartavya' pillars—productivity‑led growth, national capacity creation and universal opportunity access—signalling a push toward a more competitive, future‑ready economy.

With a historic capital expenditure outlay of Rs 12.2 lakh crore, a renewed manufacturing push across strategic sectors, stronger support systems for MSMEs and rural enterprises, large-scale tourism and heritage initiatives, and a sweeping regulatory refresh, the Budget attempts to fire the economy on multiple engines.

Markets were shaken by the steepest announcement of the day—the tripling of Securities Transaction Tax on futures trading, a move that increases costs for brokers and leveraged traders even as the government doubles down on long-term, supply‑side reforms.

Chartered accountants' apex body ICAI on Sunday said the proposals in the 2026-27 Union Budget aim to establish a stable regulatory environment that enables enterprises to concentrate on innovation and growth, according to PTI. 

ICAI President Charanjot Singh Nanda said proposals in the Budget align with the overarching objective of the Income Tax Act, 2025 -- simplifying legal language and mitigating litigation to foster trust and accelerate decision-making.

"The reduction in taxes on foreign travel and civil aircraft spare parts will give a major boost to the civil aviation sector

It will strengthen airport infrastructure and accelerate connectivity, helping us move faster towards the vision of Viksit Bharat 

Support has been extended for seaplanes, including encouragement for domestic production 

The provision of viability gap funding, is a visionary step

This will promote indigenous manufacturing, improve last-mile and regional connectivity

This will unlock the tourism and economic potential of coastal, island and remote areas of the country," Naidu said in a post on X. 

"The budget continues with the trajectory to help meet the goal of Viksit Bharat by focusing on deepening of reforms and further supporting manufacturing growth. A number of schemes have been announced for this. These will deepen the domestic value chains across sectors as well as integrate them with global value chains. And third, it will help in building skills in sync with requirements of modern technology led industry. It will lead to increasing productivity of Indian economy and improve infrastructure. There are a number of steps in the budget that will attract foreign investments. Initiatives in the budget will facilitate exports by reducing compliance burdens through easier custom processes. This will help domestic manufacturing and enable them to take full advantage of recent FTAs," said Department for Promotion of Industry and Internal Trade Secretary Amardeep Bhatia. 

Markets are used to tweak in taxation and the adverse impact of the steep hike in securities transaction tax (STT) will not last long, leading bourses said on Sunday.

NSE, the largest stock exchange, feels that the move to curb volumes will not have any impact on its upcoming initial public offering (IPO) plans, its Managing Director and Chief Executive Ashish Kumar Chauhan said.

"What has been raised is the STT has been increased in a minor way. Broadly, markets are used to having STT on options and this time it has also been increased on futures but broadly, I do not see any large impact on the IPO of NSE or otherwise asset valuations in the stock market going forward," Chauhan told PTI.

Rival BSE's Managing Director and Chief Executive S Ramamurthy said markets react in a "bit adverse" way whenever any such changes are proposed by the government and exuded confidence that gradually things will settle down.

"This is not the first time that STT is increased. When any such move is announced, the market reaction is a bit adverse to start with and then it stabilises," he said.

(Source: PTI)

India should become a "major AI hub" in coming years, and Indian IT sector's pivot towards artificial intelligence will be crucial towards this, Union IT and Electronics Minister Ashwini Vaishnaw said on Sunday, hours after the Budget 2026-27 unveiled the launch of India Semiconductor Mission (ISM) 2.0.

"Semiconductor is a multi-year journey," Vaishnaw told NDTV, adding that India has been consistently taking efforts to emerge as a hub for innovation in the space of artificial intelligence.

Read More Here: India Should Become 'Major AI Hub', IT Sector's Pivot Crucial, Says Ashwini Vaishnaw

In an interview with NDTV, Commerce Piyush Goyal said, "fabulous budget that has been presented by Sitharaman demonstrates that our reform express powers on. Ever since independence day address of the Prime Minister, we have Seen 350 reform measures, this is reflective of the speed of change."
 

The Income Tax Department explained that the Union government's decision to hike the securities transaction tax on futures and options from 0.02% to 0.05% will "curb purely speculative activity in options and futures".

"STT has been raised only on options and futures. The rate for futures now is 0.05 and for options is 0.15. Total volume of transactions in options and futures is more than 500 times of Indian GDP. In Rupee terms, our GDP is 300 lakh crore rupees.  Volume for options and futures is more than 1.5 lakh lakh crore rupees. Therefore there is justification for an increase in rates to curb purely speculative activity in options and futures," it said in a post on X on Sunday, adding that other STT rates remain the same.

Read more here: STT Hike Undertaken To Curb Speculative Activity In F&O, Says Govt

Undeclared cryptocurrency assets will now attract a penalty of Rs 200 per day, as per Section 509 of Income Tax Act 2025. Also, a penalty of Rs 50,000 will be levied for furnishing inaccurate particulars and failure to correct such inaccuracy. 

The new act will come into effect from April 1, 2026 onwards, replacing the existing Income Tax Act 1961. Finance Minister Nirmala Sitharaman announced while presenting the Union Budget on Sunday.  

"To ensure compliance to the provisions of section 509 of the Act and create a deterrence for non-furnishing of such statement or for sharing inaccurate information in such statement, it is proposed to introduce penalty provision. Penalty of Rs. 200 per day for non-furnishing of statement and Rs 50,000 for furnishing inaccurate particulars and failure to correct such inaccuracy is proposed to be levied," the Budget document highlights. 

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Bhutan was on Sunday allocated the largest share of Rs 2,288 crore as development aid in the Union Budget for 2026-27, followed by Rs 800 crore to Nepal and Rs 550 crore each to the Maldives and Mauritius.

The Ministry of External Affairs (MEA) was allocated a total of Rs 22,118 crore as against the current fiscal's budget estimate of Rs 20,516 crore and revised estimate of Rs 21,742 crore, reports PTI.

Finance Minister Nirmala Sitharaman on Sunday proposed a transfer of over Rs 43,290 crore to Jammu and Kashmir for 2026-27, higher by 4.72% over the current fiscal, reports PTI.

According to the budget document, total transfers to the Union Territory have been pegged at Rs 43,290.29 crore, up from Rs 41,340.22 crore in 2025–26 Revised Estimates (RE).

The funds have been proposed as 'Central Assistance to Union Territory', which has risen by Rs 2,030.97 crore, from Rs 40,619.30 crore in 2025–26 to Rs 42,650.27 crore in 2026–27, an increase of 5%.

“The Union Budget lays a strong foundation for sustained growth across India’s mobility and manufacturing ecosystem, with continued emphasis on infrastructure development, expansion of freight and logistics networks, and focused support for construction and equipment manufacturing, directly translating into higher vehicle utilisation on roads and worksites. This, in turn, drives demand for tyres across commercial and passenger segments, while the push for Tier II and Tier III city growth further broadens mobility needs beyond metros, creating a durable demand environment and a positive long-term outlook for the automotive and tyre industry. Importantly, the focus on education infrastructure and skilling—including measures that encourage greater participation of women in technical and professional roles—will help industry build a more diverse, future-ready manufacturing workforce," says Arnab Banerjee, MD & CEO, CEAT Limited

"The Union Budget 2026 sets a clear direction for India’s next phase of growth, with AI, digital infrastructure, and services positioned as central to national progress. By placing AI at the heart of economic and governance priorities, the Government has signalled its commitment to building a more productive, competitive, and technology‑led economy," said Puneet Chandok,  President, Microsoft India & South Asia.

Aditya Vardhan Agarwal, Director, Emami Group says,

“The Union Budget 2026 is a confident and future-oriented step toward India’s growth - anchored in transformative infrastructure, inclusive development, and innovation. From high-speed rail and industrial corridors to the SME Growth Fund, Tier-2 and Tier-3 infrastructure, women entrepreneurship, and AI-led agriculture, the budget lays a strong foundation for jobs and productivity. The emphasis on enhancing export competitiveness and ease of trade further strengthens India’s manufacturing ecosystem and global integration, positioning the country for resilient and sustainable growth.”

“The Union Budget 2026–27 is directionally positive for India’s long-term economic health, even though markets have reacted nervously in the short term. The increase in Securities Transaction Tax on F&O trading is a necessary corrective. Over the past few years, speculative derivatives trading activity has destroyed large amounts of household capital, and this move should help redirect savings towards consumption and productive investment. Equally important is the government’s decision to set up a high-level committee to review the banking and financial system, which could accelerate PSU bank privatisation and unlock greater participation from global and domestic private capital."

Indian Chamber of Commerce says

"Budget to position NE as a multi-dimensional growth engine. Announcements in the Union Budget 2026-27 will spur overall development of the northeast, positioning it as a “multi-dimensional growth engine."

"Bharti remains highly committed to playing its part in enabling technology-led growth, expanding financial inclusion, and accelerating future-ready education. Bharti's investments in science, innovation, and research are timely & will strengthen domestic capabilities, advancing import substitution in critical sectors. 
Bolstering infrastructure and logistics with a focus on energy-efficiency & impetus to the data centre ecosystem will further reinforce confidence in our burgeoning digital economy. 

"Bharti remains highly committed to playing its part in enabling technology-led growth, expanding financial inclusion, and accelerating future-ready education through Bharti Airtel Foundation to secure India’s talent dividend."

The Union Budget 2026–27 left the bullion industry without the import duty cut and GST changes it had sought, even as the government moved to narrow a capital gains exemption linked to sovereign gold bonds, said Prithviraj Kothari, managing director at RiddiSiddhi Bullions Ltd. and president of the India Bullion and Jewellers Association Ltd.

The sector had expected a lower import duty on gold, GST rationalisation, export incentives and extended credit support, Kothari told NDTV Profit, adding that the Budget instead announced a capital gains tax exemption on RBI sovereign gold bonds that will apply only to original subscribers, not to those who buy in the secondary market.

Finance minister Nirmala Sitharaman’s speech included a proposal that limits the capital gains exemption on sovereign gold bonds to bonds subscribed at original issue and held until redemption on maturity.

Market veteran Shankar Sharma said he welcomed the Budget mainly because the government raised the securities transaction tax (STT) on derivatives, a move he said could curb futures-and-options activity among retail traders.

“I love this Budget for ONE major reason: hiking of STT on derivatives,” Sharma said in a reaction shared after the speech. He said derivatives trading had harmed young participants and said the effect would last for years.

Read the full story here:

On the rationale behind the buyback tax, Revenue Secretary Arvind Shrivastava said that the measure is intended as a relief and not as an additional tax burden. He explained that the earlier structure of the buyback tax had effectively treated the proceeds as dividend income, which created anomalies. This has now been corrected by reclassifying buyback gains as capital gains, thereby placing the taxation directly in the hands of shareholders. According to him, this correction ensures that shareholders receive relief rather than face higher tax liability.

He further noted that for promoters, the change results in an additional buyback tax; however, this merely maintains the existing tax status quo. The effective tax rate remains at about 30 per cent for individual promoters and 22% for corporates. In contrast, for other shareholders, the revised framework acts as a clear relief, aligning buyback taxation more fairly with capital gains treatment.

India's benchmark indices Nifty and Sensex logged their worst Budget Day session in six years as a move to raise STT on derivatives trading and lack of higher spending goals weighed on sentiment. 

"The volumes in F&O market is in the realm of heavy speculation when compared to the size of GDP or underlying securities market. This results in huge losses to retail investors. The government's intention is to discourage speculation. The increase in STT is meant to handle the systemic risk in derivatives market. The rate is still modest compared to the volume," said Arvind Shrivastava, Revenue Secretary in the Ministry of Finance.

"The announcements under Semiconductors Mission will improve the India Stack. There is major push for domestic electronics manufacturing. Rare earth corridors will help India meet its requirements and reduce import dependence," said Finance Minister Nirmala Sitharaman.

The government has identified Odisha, Kerala, Andhra Pradesh and Tamil Nadu for critical mineral mining.

 

• STT hike another such measure that deters the pace of growth in derivatives speculation, while also augmenting government revenues.
• Expect sentiment around the derivatives trading value chain to be soft and some volume impact
• For Nuvama, the higher STT should hurt profitability of market-makers/high-frequency trading outfits.
• Insurance sector saw limited attention in the Budget speech.
• No big-ticket changes in sector dynamics, or in tax rates for savers.
• There was no discussion on insurance commissions, something that featured in the economic survey.

"I welcome the Government's keen attention to critical minerals and rare earths. The Rare Earths Corridors for mining, processing, R&D and manufacturing in Odisha, Tamil Nadu, Andhra and Kerala will boost growth, employment and mineral security. Import duty exemption on capital goods for critical minerals processing is very timely in the current global scenario. The announcement on flexibility in SEZs, which will permit some sales in domestic market is an excellent move," said Anil Agarwal, Chairman of  Vedanta.

Leader of Opposition in Lok Sabha Rahul Gandhi said the Budget 2026 is "blind to India’s real crises".

Market veteran Shankar Sharma said on X:

"I love this Budget for ONE major reason: hiking of STT on derivatives. Derivatives are a poison x cocaine, eating away at the roots of our youth. Its destructive effect will be felt by generations. It's a pure wealth transfer from the traders to F& O specialist brokers, who have been massive winners of this drug gun trade. ( Not their fault). F&O adds zero value to India. It deducts inestimable value. It can't be stopped but it can be taxed the hell out of. Kudos to the Finance Minister."

In one of the most striking announcements of the Union Budget 2026-27, the government has proposed a sweeping tax holiday for foreign companies providing cloud services to global customers using data centres located in India. The exemption — valid until 2047 — marks an unprecedented effort to attract large-scale digital infrastructure investment and position India as a long-term player in the global cloud ecosystem.

Read full story.

"The hike on STT is going to impact the sentiment for the near term for sure. I think there will be concerns if that will lead to any volumes as well because liquidity is extremely important for the markets," said Nilesh Shah of Kotak Mahindra AMC.

"There are many other positives such as infrastructure, focus on textiles, semi-conductors, rare ear minerals. In the short term, it will impact market sentiment but lots of things in store doe medium to long term. One big positive -  focus on infrastructure, spending on infrastructure has been taken up to 12.2 lakh crore. The talk on more high speed rail corridor, focus on waterways, I think these are some of the big positive out there. To me the biggest positive here is the continued focus on infrastructure," he added.

"This budget allocates Rs 7.85 lakh crore for the defence sector... This budget, following the historic success of Operation Sindoor, has reinforced our resolve to further strengthen the country's defence system.... This year, a provision of Rs 2.19 lakh crore has been made for the overall capital expenditure of our armed forces, and the key focus of this budget is the modernisation of our three armed forces. For this, a provision of Rs 1.85 lakh crore has been made... In short, this budget strengthens the balance between security, development, and self-reliance," said Defence Minister Rajnath Singh.

"The support that MSMEs have received in this year's budget will give them new strength to grow from local to global," said PM Modi in post-Budget comments.

The Budget has focussed on measures like expanding high-speed rail corridors, and bringing reforms related to issuance of municipal bonds, in order to boost infrastructure, PM Modi said.

'Make in India' has emerged as a roadmap of the FY27 Budget, Prime Minister Narendra Modi said in a televised address following the presentation of Union Budget.

"This is one such unique budget which has focus on bringing down fiscal deficit, on bringing inflation under control and with this, Budget also has the combination of high CapEx and high growth."

"Continued exemption of Basic Customs Duty on Capital Goods used for manufacturing lithium-ion batteries, along with the extension of concessional duty benefits for lithium-ion cells and their parts used in manufacturing batteries for electric and hybrid vehicles for a further two years till March 2028, will enable creation of a robust EV ecosystem in the country," said Shailesh Chandra, President, SIAM and MD & CEO, Tata Motors Passenger Vehicles.

The key takeaways from this Budget is the "focus on reforms, macroeconomic stability, and benefits across all sections of society", CII President Rajiv Memani told news agency PTI. There has been a "clear prioritisation of sectors", and simplification of taxes has also been in focus, she added.

"Overall, Budget 2026–27 positions agriculture as a strategic engine of growth by treating irrigation efficiency, technology adoption, and rural infrastructure as core investments rather than discretionary spending. By aligning fiscal prudence with farmer-centric initiatives, the government is creating the foundation for sustainable income growth, water security, and a resilient, future-ready agricultural sector in India," said Vivek Gupta, Managing Director of Oswal Pumps.

"Exempting motor accident payouts from tax reinforces the government’s intent to make insurance outcomes more humane and consumer-first. Simplified tax filing norms are another important step in making compliance more accessible and will add to ease of doing business," said Yashish Dahiya, Chairman and Group CEO, PB Fintech.

"This budget has proposed a capital expenditure of Rs 12.10 lakh crore which is more than the net market borrowing of Rs 11.70 lakh crore. I pray that a path is laid where one day capital expenditure will be more than the total borrowing including small savings," said Nilesh Shah, Managing Director, Kotak Mahindra AMC.

Finance Minister Nirmala Sitharaman unveiled Modi 3.0's third Union Budget 2025-26 on Sunday, Feb. 1, with its key focus areas on boost for India's infrastructure growth and capex allocation. With today's budget, the finance minister's policy announcements have resulted in price reductions for several items.

Read full story here.

“By placing biopharma among the seven strategic frontier sectors and launching Biopharma Shakti with an outlay of Rs 10,000 crore over five years, the Union Budget makes a decisive investment in India’s health and innovation future. As India’s disease burden shifts toward cancer, diabetes and autoimmune disorders, biologics and biosimilars will be central to improving longevity and quality of life. This initiative—spanning manufacturing scale-up, global-grade regulation, new NIPER institutions and a nationwide clinical trials network—can firmly position India as a global biopharma manufacturing hub," said Kiran Mazumdar Shaw, Chairperson, Biocon Group.

The Union Budget 2026 brings a wave of significant reforms for salaried taxpayers, with Finance Minister Nirmala Sitharaman emphasising simpler compliance, reduced litigation, and meaningful relief for individuals. A major highlight is the rollout of the Income Tax Act 2025, which will replace the 1961 law and come into force on April 1, 2026.

Sitharaman noted that tax forms have been redesigned to ensure “ordinary citizens can comply without difficulty,” marking a major shift toward user-friendly processes.

Read full story.

Unveiled on the twin occasions of Magh Purnima and Guru Ravidas Jayanti, the Union Budget 2026 was positioned by Finance Minister Nirmala Sitharaman as a continuation of 12 years of economic stability and disciplined fiscal stewardship. The government framed the document around three guiding ‘Kartavya' pillars—productivity‑led growth, national capacity creation and universal opportunity access—signalling a push toward a more competitive, future‑ready economy.

With a historic capital expenditure outlay of Rs 12.2 lakh crore, a renewed manufacturing push across strategic sectors, stronger support systems for MSMEs and rural enterprises, large-scale tourism and heritage initiatives, and a sweeping regulatory refresh, the Budget attempts to fire the economy on multiple engines.

Read Budget 2026 Key Highlights.

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Finance Minister Nirmala Sitharaman has introduced the Finance Bill 2026 in the Lok Sabha.

Speaker Om Birla has adjourned the House. The next sitting will be on Monday.

Finance Minister Nirmala Sitharaman has concluded her Budget 2026 speech. The address lasted 1.25 hours.

• To increase limit for duty-free imports of specified inputs for processing seafood for export to 3% from 1% of FOB value
• To allow duty free imports of specified inputs available for exports of leather
• To extend basic customs duty exemption for capital goods used to manufacture BESS
• To exempt customs duty on sodium antimonate for use in manufacture of solar glass
• To exempt customs duty on imports of goods for nuclear power projects till 2035
• Proposed to exempt customs duty on raw materials for manufacture of parts for aviation
• To exempt basic customs duty on specified parts for microwave ovens.

Finance Minister Nirmala Sitharaman has proposed that buyback proceeds for all categories of shareholders will now be taxed as capital gains, moving away from earlier mechanisms that treated different shareholders differently.

Announcing a major change in the taxation of share buybacks in her Budget speech, she explained that under the new structure, corporate promoters will face an effective tax rate of 22%, while non‑corporate promoters will be taxed at 30% on buyback transactions.

Read more.

Finance Minister Nirmala Sitharaman proposed to hike Securities Transaction Tax (STT) on derivatives trades. Aimed at curbing speculative trading in the high-volume futures and options (F&O) segment, STT on futures will be raised from 0.02% to 0.05%. The impact on options is even more pronounced, with tax on option premiums set to increase from 0.1% to 0.15% while the STT on the exercise of options will rise from 0.125% to 0.15%.

Investors were quick to react to the news, sending shares of BSE on a downward spiral. 

Read full story.

• All IT services to be clubbed under a single category with a common safe harbour margin of 15.5%
• Threshold for availing safe harbour for IT services to be enhanced to `2000 cr from `300 cr
• Safe harbour for IT services to be approved by an automatic rule-driven model
• To provide a tax holiday till 2047 to any foreign company that provides cloud services by setting up data centres in India
• To provide a safe harbour of 15% on cost in case co providing data services from India is a related entity

ICC National Textile Chair Sanjay K Jain says

• National Fibre Mission to achieve self-reliance in natural fibres like silk, man-made, and special-use fibres.
• Launch of the Mahatma Gandhi Gram Swaraj Initiative to promote khadi, handloom, and handicrafts.
• Samarth 2.0 to strengthen the textile skill ecosystem and promote modernisation.
• Expansion of the textile industry and employment generation scheme to modernise traditional textile clusters.
• National Handloom and Handicrafts Programme for the integration and scaling up of existing schemes.
• Textile Eco Initiative for world-class and sustainable textiles and garments.
• Establishment of Mega Textile Parks in mission mode.

The Budget proposes to allow inter-cooperative society dividend income as deduction under New Tax Regime.

• To extend time available to revise returns with payment of nominal fee
• Individuals with ITR1 and ITR2 to continue to file till July 31
• Non-audit business cases, Trusts to be allowed time to file returns to Aug 31
• TDS on sale of immovable property by NRI to be deducted by resident buyer vs earlier requirement of TAN
• Propose to rationalise prosecution framework in Income Tax Act
• Interest awarded by the motor accident claims tribunal to a natural person will be exempt from income tax and any TDS on this account will be done away with.
• To allow taxpayers to update returns even after reassessment proceedings have been completed with 10% tax

Read more.

• Revised estimates of expenditure in FY26 was Rs 49.6 lakh crore
• FY27 expenditure estimated at Rs 53.5 lakh crore
• FY27 net market borrowing from dated securities estimated at Rs 11.7 lakh crore
• Gross market borrowing seen at Rs 17.2 lakh crore
• Net tax receipts estimated at Rs 28.7 lakh crore in FY27

• Debt to GDP ratio estimated at 55.6% of GDP in BE2026-27 vs 56.1% in RE25-26
• Fulfilled commitment made in FY22 to reduce Fiscal deficit below 4.5% of GDP
• In RE 2025-26 Fiscal Deficit estimated at 4.4% of GDP
• In line with new fiscal prudence path Fiscal Deficit estimated at 4.3% of GDP in FY27

Crisil View: Capex to GDP at Rs 12.2 lakh crore is at 3.1% of Crisil’s GDP estimate for next fiscal. The budget estimate for this fiscal was also 3.1%. Grants in aid for capital creation typically should add another 1% points to this.

• To provide special attention to small farmers
• To undertake initiatives to develop 500 reservoirs
• To strengthen fisheries value chain in coastal areas
• To support animal husbandry through credit-linked subsidy programme
• To encourage creation of livestock farmer producer organisations
• To support high-value crops such as coconut, sandalwood, cashew in coastal areas
• To support generation of walnuts in hilly regions
• Dedicated programme proposed for Indian cashew and cocoa
• To promote focused cultivation of sandalwood

• To set up a National Institute of Hospitality
• Propose scheme for training of guides in tourism hubs in India
• India has potential and opportunity to offer world class trekking, hiking destinations
• Turtle trails along key nesting sites in Orissa, Karnataka, Kerala to be developed
• To develop 15 archaeological sites across country

• Government to support States through challenge routes to create five university townships
• Planned academic zones to host multiple colleges, skill centres, residential areas
• Proposal to set up one girls hostel in every district

• India's animation, visual effects, gaming sector is growing industry
• Propose to support Indian Institute of Creative Technologies in Mumbai to set up labs across country
• To establish through challenge route new national institute of design in East India.

Finance Minister Nirmala Sitharaman proposes an outlay of Rs 20,000 crores over the next 5 years in Carbon Capture Utilization and Storage (CCUS) technologies to scale up and achieve higher readiness levels in end-use applications across.

• Propose to set up high-powered education-to-employment standing committee
• Committee to prioritise areas to optimise potential for growth in services space
• Committee to review impact of new technology like AI on services sector
• Existing institutions for allied health professionals to be upgraded
• New AHP institutions to be set up in private, govt sectors
• Strong care system covering geriatric, allied sectors to be built
• Hubs for medical value tourism to be created
• Propose to launch scheme to support States to set up 5 regional medical hubs
• Medical hubs to have Aayush centres, infra for diagnostics, post care rehabilitation

• Propose setting up high-level committee on banking for Viksit Bharat to comprehensively review banking sector.
• Vision for NBFCs for Viksit Bharat has been outlined with clear targets.
• Propose to restructure Power Finance Corp, REC
• Propose comprehensive review of Foreign Exchange Management framework
• Propose to introduce a market making framework to promote corporate bond market
• Individual persons resident outside in India to be permitted to invest in equity through Portfolio Investment Scheme
• Individual Persons Resident Outside India (PROI) will be allowed to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme. It is also proposed to increase investment for PROI from 5% to 10%.

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• Propose to set up Infra Risk Guarantee Fund to strengthen private developers risk management.
• Propose setting up of dedicated REITs to recycle assets of CPSEs
• To operationalise 20 new National waterways over next five years
• Training institutes to be set up as regional institutes of excellence in waterways space
• Ship repair ecosystem catering to inland waterways to be set up in Varanasi, Patna
• To launch coastal cargo scheme to increase share of coastal shipping, inland waterways
• To enhance last-mile, remote connectivity to give support to manufacturing of sea planes

Read full story.

Finance Minister Nirmala Sitharaman pegged the Union Budget 2026's capital expenditure at Rs 12.2 lakh crore for FY27.

The capex for FY26 was Rs 11 lakh crore,

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The Budget proposes to launch Mahatma Gandhi Gram Samaj initiative to support Khadi, handicrafts. The government will also introduce dedicated initiative to promote globally competitive sports goods. 

• To support mineral rich states of Orissa, Kerala, Andhra Pradesh, Tamil Nadu
• To launch scheme to support states in estabilishing three dedicated chemical parks
• Propose scheme for container manufacturing with budgetary allocation of Rs 10,000 crore over 5 year
• Propose National Fibre Scheme for self-sufficiency in fibres
• Propose Textile expansion and employment scheme to modernise textile clusters. Aim for Samarth 2.0 to promote skilling in textile sector

Read more. 

The government will launch India Semiconductor Mission 2.0 with focus on industry-led research and training centres for semiconductors, increase outlay to Rs 40,000 crore to capitalise on momentum of semiconductor mission.

The Union Budget proposes to develop India's global bio-pharma hub under 'Biopharma Shakti' with Rs 10,000 crore outlay over five years. It will create network of 1000 accredited trial sites to bolster bio-pharma industry.

Finance Minister Nirmala Sitharaman proposed interventions in key areas:

• Propose to scale up manufacturing in strategic sectors
• Aim to create champion MSMEs
• To ensure long-term security and safety
• To develop strategic economic regions
• India's disease burden is observed to be shifting to non-communicable diseases

Read: Nirmala Sitharaman Announces Proposal To Build Rare Earth Mineral Corridors In India

"Government has undertaken comprehensive reforms for accelerating growth, boosting productivity. Over 350 reforms have been rolled out recently. Central government working with State governments on deregulations. The reform express is well on its way," said Finance Minister Nirmala Sitharaman.

Finance Minister Nirmala Sitharaman said the Budget 2026 is 'Yuva Shakti' driven.

"First is to accelerate and sustain economic growth by enhancing competitiveness, second is to fulfill aspirations of our people. Third kartavya is to ensure that every family, community, region has access to resources, opportunities. Threefold approach requires supportive ecosystem," she said.

"We have ensured that citizens benefit from every action of the government. Measures have delivered high growth rate of around 7%. Measures helped make substantial strides in poverty alleviation. India will continue to take confident steps towards Viksit Bharat," said Finance Minister Nirmala Sitharaman.

"India's economic trajectory marked by stability over 12 years. Stability has been displayed amidst ongoing uncertainty. Government has preferred reform over rhetoric and pursued far-reaching reforms," said Finance Minister Nirmala Sitharaman.

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The Lok Sabha has convened for the Budget presentation. Speaker Om Birla is making opening remarks and will call on Finance Minister Nirmala Sitharaman to address the House.

The Modi Cabinet has approved the Union Budget 2026.

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President Murmu extended her best wishes to the Union Finance Minister and her team for the presentation of Budget. Her office released photos from the meeting.

The Union Cabinet chaired by PM Narendra Modi is currently meeting in Parliament to consider and approve the Union Budget 2026.

Top Stocks To Watch For Budget

• L&T, IRB Infra – capex key to watch; capex growth of less than 10% could be disappointing
• HAL, BDL, BEL – defence capex key to watch; growth of less than 20% could be disappointing
• Dixon, Amber, PG Electro - Budget allocation under PLI scheme; specifically mobile PLI as the same ends in FY26
• Home First, PNB Housing, LIC Housing, Aavas Housing - Increasing allocation for housing schemes (CLSS)
• IOCL, BPCL, HPCL – hike in excise duty by more than Rs 2/litre would be negative
• Adani Green, Tata Power and Waaree Renewable – increased allocation for solar irrigation pumps

Follow Stock Market Live Updates here.

Gold financiers are feeling the heat of gold prices 

• Manappuram shares are down over 6%
• Muthoot Finance shares are down over 11%

What's in store for gold in Budget 2026?

Saurabh Mukherjea, Founder & Chief Investment Officer of Marcellus Investment Managers, explains why last year's income tax and GST cuts proved to be a game-changer for the economy.

WATCH:

Nirmala Sitharaman has reached Parliament complex in New Delhi. The Union Cabinet chaired by PM Modi will convene shortly to approve the Union Budget 2026.

Ahead of Nirmala Sitharaman's budget speech, GST data for January shows a pick up in collections. Gross GST revenue rose 6.2% YoY to Rs 1.93 lakh crore and net GST revenue jumped 7.6% to Rs 1.7 lakh crore. 

Net Cess revenue down 55% to Rs 5,768 crore.

Turning attention to the commodity markets, silver prices fell again Sunday morning, plunging up to 10% on the MCX as the global sell-off in the metals market continues.

The Silver MCX is currently trading at around Rs 2.65 lakh. The prices are down 36% from record highs, a drawdown that is part of a larger correction in precious metals.

Read more: Silver Extends Fall Ahead Budget 2026; Declines 9% On MCX

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Union Finance Minister Nirmala Sitharaman along with Minister of State For Finance Pankaj Chaudhary and other officials heads to Rashtrapati Bhawan ahead of presenting the Budget.

India's benchmark equity indices opened lower ahead of the Union Budget 2026.

The Nifty and Sensex are down.

Follow Stock Market Live Updates here.

Nirmala Sitharaman is wearing a handwoven Kancheevaram silk sari, honouring Tamil Nadu’s age old weaving legacy. It is a purple coloured Kattam Kancheevaram, with light golden brown checks, aka kattam, and a coffee brown border with thread work. This continues her quiet championing of the country’s various handloom weavers and their kala, from Mangalgiri and Ikat, to Bomkai, Kantha, Madhubani, and more.

Source: NDTV

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The shares of PSU Bank stocks like Bank of Maharashtra, Punjab National Bank, State Bank of India will be in focus as the government may propose the Banking Governance Bill today. The move aims to make PSU banks professional, competitive, and tech-driven, sources told NDTV Profit.

The bill will also likely ensure PSU banks can finance large projects and not just safeguard public savings. The Bill may look into better board composition, clearer accountability and could also address concerns over pay and talent gaps between public sector banks (PSBs) and private banks, as per sources.

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NDTV Profit's Niraj Shah explains the math behind India's growth plan.

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Finance Minister Nirmala Sitharaman will unveil Modi 3.0 government's third straight budget on Feb. 1, 2026. India's middle-class and salaried employees are expecting more income tax cuts in India Budget 2026. D-Street investors are eyeing exemption on higher LTCG tax and STT.

Follow Live Updates On Income Tax.

India's stock markets will be open on Sunday for the Budget day. Both NSE and BSE will conduct equity trading under regular market hours.

It is to be noted that Sunday remains a settlement holiday. Although stock markets will remain open, shares traded on Friday cannot be squared off today because of the disruption to the normal settlement cycle.

Follow Stock Market Live Updates here.

ASLO READ: All You Need To Know Going Into Trade On Feb 1

Here are some important fiscal metrics to watch out for in Budget 2026.

GDP Growth

The government's approach to gross domestic product (GDP) growth rate will be watched out for by all in FM Sitharaman's Budget speech in view of the economic challenges posed by the US tariffs and geopolitical tensions. The Economic Survey, presented in Parliament on Jan. 29, has projected a real GDP growth rate of 6.8-7.2% for FY27, compared to 7.4% estimated for the current fiscal (FY26), reflecting a steady economic advancement.

Fiscal Deficit 

The fiscal deficit was estimated at 4.4% of GDP for FY 2025-26. In this Budget, the government is likely to reduce the fiscal deficit target further.

Revenue Deficit 

The gap between revenue expenditure and revenue receipts was expected to narrow to Rs 5.24 lakh crore in FY26, or 1.5% of GDP, compared to Rs 6.1 lakh crore (1.9% of GDP) in the revised estimates of 2024-25. 

Capital Expenditure 

The Budget 2025 underscored continued emphasis on capital spending, with capital expenditure on the books at Rs 11.21 lakh crore for FY 2025-26, slightly higher than the revised Rs 10.18 lakh crore for the previous financial year. 

ALSO READ: Budget 2026: Key Fiscal Numbers To Track — From Deficit And Debt To Capex

Finance Minister Nirmala Sitharaman, along with the Budget team, will leave from Kartavya Bhawan for Rashtrapati Bhavan at 8:45 a.m., sources told NDTV Profit. It is customary for the FM to present a copy of the Union Budget to the president before heading to Parliament.

Budget Wishlist From India Inc

• Promote indigenous manufacturing & support innovation 
• Policy certainty is the key driver of long-term investment
• Tax certainty & uniformity in implementation of tax laws
• Speedier resolution mechanism for IT, GST & Customs duty disputes
• Export frameworks and customs alignment to support manufacturing
• Momentum builds for API-driven customs systems
• Managing the transition to the New Income Tax regime
• Funding and incentives to support early-stage and MSME growth
• Tax credits as catalysts for green investment and low-carbon R&D
• Ease land acquisition challenges for the speed of doing business 

Defence-linked stocks are likely to remain in focus during the Union Budget 2026 on Feb. 1, as investors factor in a moderate increase in defence outlay and continued emphasis on indigenisation.

Hindustan Aeronautics is seen benefiting from its aircraft and engine manufacturing pipeline, while Bharat Electronics remains a key play on defence electronics, radar and communication systems.

Bharat Dynamics is also on investors' radar given its role in missile manufacturing, while shipbuilders such as Mazagon Dock Shipbuilders and Garden Reach Shipbuilders are being tracked amid ongoing naval modernisation.

Nirmala Sitharaman had, in her first Budget in 2019, replaced the leather briefcase, which had been in use for decades for carrying Budget documents, with a traditional 'bahi-khata' wrapped in red cloth. This year's budget will be in paperless form, as done in the last four years.

This year's Union Budget 2026 presentation is set to break a 75-year tradition, with the government preparing to overhaul the structure of the Finance Minister's speech, sources told NDTV. Historically, Part A of the Budget has carried most of the detailed policy announcements, while Part B served primarily as a shorter segment focused on tax proposals and select updates.

That convention is expected to change this year. According to people familiar with the matter, Finance Minister Nirmala Sitharaman is likely to devote unprecedented detail and emphasis to Part B, making it the most closely watched portion of the speech. The section is expected to serve not just as a tax policy outline but as a broader statement on India's economic direction.

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The budgeted fiscal deficit, which is the difference between the government's expenditure and income, for fiscal 2026 is estimated at 4.4% of GDP. Having achieved a fiscal consolidation roadmap with a deficit below 4.5% of GDP in fiscal 2026, the markets will keenly watch for direction on debt-to-GDP reduction.

The Union Budget 2026 comes against a complex backdrop for India. Domestic demand has held up following direct and indirect tax cuts, inflation has sharply moderated, global uncertainties including geopolitical tensions, trade frictions, volatile commodity prices and uneven monetary easing by major central banks continue to cloud the outlook.

The Union Budget 2026 is likely to give top priority to rural development, and development of the agriculture sector. Nirmala Sitharaman is expected to announce more funds for programmes to raise employment opportunities in rural areas, according to sources.

The Rural Development Ministry has asked the Finance Ministry to increase the budget of the new employment guarantee scheme, 'Viksit Bharat - G Ram G' or VB-G Ram G, to Rs 1.51 lakh crore, or by 72%, as per NDTV. Last year, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) got a budget of Rs 86,000 crore.