Union Budget FY 2026-2027 highlights

India’s Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 in the Parliament on Sunday, February 1, 2026, outlining the measures and schemes for the Indian economy.

The Union Budget aims at transforming aspiration into achievement and potential into performance. To this end, the budget focuses on stability, fiscal discipline, sustained growth, and moderate inflation.

“India will continue to take confident steps towards Viksit Bharat, balancing ambition with inclusion. As a growing economy with expanding trade and capital needs, India must also remain deeply integrated with global markets, exporting more and attracting stable long-term Investment,” said Nirmala Sitharaman, the Finance Minister of India.

The Finance Minister called this a Yuva Shakti-driven Budget with the First Kartavya to accelerate and sustain economic growth, the Second Kartavya to fulfil aspirations of our people, and the Third Kartavya being the vision of Sabka Sath, Sabka Vikas.  

Sustaining Economic Growth

With a vision to sustain economic growth in the country, the budget included announcements for the manufacturing, services, agriculture and financial sectors.

For the manufacturing sector, the India Semiconductor Mission (ISM) 2.0, Biopharma SHAKTI, Electronics components manufacturing scheme, and integrated programme for textiles were some of the important ones amongst others. Supportive measures for MSMEs and tax reforms to boost the manufacturing sector were also in focus.

The services sector saw measures centered around healthcare, medical tourism, content creation, design, sports, education, and tourism along with tax reforms to boost the sector.

For the agricultural and allied sectors, the budget mentioned measures to increase farmers’ income by enhancing productivity in horticulture, animal husbandry, fisheries, amongst others.

The financial sector was in the limelight as the government will be setting up a High Level Committee on Banking for Viksit Bharat. The STT (Securities Transaction Tax) on Futures contracts will be raised from 0.02% to 0.05%. On Options premium and exercise of Options, the STT will be raised to 0.15% from 0.1% and 0.125%, respectively.

Strengthening the foundation of growth

The Union Budget highlighted its attention on the infrastructure segment by outlining the following actions:

• Set up of an Infrastructure Risk Guarantee Fund which will provide prudently calibrated partial credit guarantees to lenders.
• Real estate assets of CPSEs will be recycled through the setting up of dedicated REITs.
• New Dedicated Freight Corridors connecting Dankuni in the East, to Surat in the West will be established.
• 20 new National Waterways connecting mineral rich areas, industrial centres and ports will be operationalised.
• A ship repair ecosystem catering to inland waterways will be set up.
• A Coastal Cargo Promotion Scheme will be launched to increase the share of inland waterways and coastal shipping from 6% to 12% by 2047.
• A Seaplane VGF Scheme will be initiated to indigenise manufacturing.
• States will be given ₹2 lakh crore support under the SASCI Scheme.
• Development of Integrated East Coast Industrial Corridor (Purvodaya) will begin.

For ensuring energy security and stability, the budget laid down the following plans:

• Scheme to adopt Carbon Capture Utilisation and Storage (CCUS) which will have an outlay of ₹20,000 crore.
• Import of sodium antimonate for use in the manufacture of solar glass, capital goods required for the processing of critical minerals and used for the manufacture of Lithium-Ion Cells for batteries to be used in battery energy storage systems will be exempt from Basic Customs Duty (BCD).
• The existing BCDs exemption on imports of goods required for Nuclear Power Projects, for all nuclear plants irrespective of their capacity, will be extended to 2035.
• The entire value of biogas in Central Excise duty payable on biogas blended CNG will be excluded.

Urbanisation came into focus as the government plans to amplify the potential of cities to deliver the economic power of agglomerations and develop Tier II, Tier III cities, and temple-towns. 7 high-speed rail corridors (‘Growth Connectors’) will be created between cities such as Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri with an aim to have environmentally sustainable passenger systems.

Fiscal management

The Finance Minister, in the Union Budget 2026, announced that total receipts other than borrowings and the total expenditure are estimated at ₹36.5 lakh crore and ₹53.5 lakh crore respectively. The net tax receipts are estimated at ₹28.7 lakh crore. The fiscal deficit for 2025-26 is estimated to be 4.3% of the GDP.

“To finance the fiscal deficit, the net market borrowings from dated securities are estimated at ₹11.7 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at ₹17.2 lakh crore,” said the Finance Minister Nirmala Sitharaman in her speech.

The central government will attempt to reach a debt-to-GDP ratio of 50% (+ or - 1%) by 2030. The debt-to-GDP ratio is estimated to be 55.6% of GDP in BE 2026-27, versus  56.1% of GDP in RE 2025-26.

Conclusion

The Union Budget FY 2026-2027 presented by Finance Minister Nirmala Sitharaman unveiled several measures for driving economic growth across sectors and also outlined several tax reforms. The announcement also highlighted the government’s plans for Ease of Doing Business and Ease of Living in the country. The vision for Viksit Bharat remains ‘Sabka Sath, Sabka Vikas’.