Takeaways from Indian Financial Budget 2026

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On February 1st, 2026, the Finance Minister of India, Mrs Nirmala Sitharaman, presented the financial budget for the financial year 2026-2027. It was the third shortest budget speech ever. On 30th January, the minister submitted the Economic Survey for the year 2025-2026 with a large set of suggestions for the improvement of the economy. It was the ninth consecutive budget of Ms Nirmala Sitharaman. The budget was aimed at simplifying taxation, boosting domestic manufacturing and exports, and much more. It came amidst the global uncertainties and Trump's tariffs. 

The Minister emphasised that since the Modi Government assumed office, the economy has been marked by a state of stability, fiscal discipline, sustained growth, and moderate inflation. She emphasised that- “India must remain deeply integrated with the global markets, exporting more and attracting stable long-term investments.” There was also a special tradition session on the occasion of the budget on a Sunday whch is rare event. 


Major Announcements from the Budget Speech 

  1. Fiscal Deficit target- 4.2% (2% decrease)
  2. Expenditure- 54.1 lakh crore (7.9% increase)
  3. Under the theme of "Sabka Vikas".
  4. Debt to GDP Ratio- 55.6%.
  5. Expected 7% (6.8% to 7.2%) growth rate
  6. Inflation of 1.7%.
  7. Capital Expenditure- Rs. 12.2 lakh crore. 
  8. Government is inspired by three Kartavyas.
  9. Income Tax Act, 2025, to be implemented from April 1
  10. Defence budget: Rs 7.84 lakh crore. 
  11. 25 cr people have come out of multi-dimensional poverty. 
  12. India will continue to take steps towards Viksit Bharat, says FM Sitharaman.
  13. Interventions in 6 sectors, including manufacturing, strategic and frontier sectors, healthcare, and advanced technology.
  14. TReDS as a transaction platform for all purchases from MSMEs by central public sector enterprises
  15.  7 high-speed corridors between cities as growth connectors. 
  16. Outlay of Rs 20,000 cr proposed for launch of carbon capture and utilisation scheme across sectors like steel and cement, says FM Sitharaman. 
  17. Indian Institute of Creative Technologies, Mumbai, for setting up content labs in 15,000 secondary schools.
  18. ₹10,000 crore investment in biopharma over the next 5 years. 
  19. Semiconductor Mission- Rs. 40,000 crore.
  20. National Destination Digital Knowledge Grid. 
  21. Bharat Vistar AI tool for agriculture.
  22. Support Artificial Limbs Manufacturing Corporation of India to scale up production of assisted devises for divyangjan
Major Takeaways 
  • Third Shortest Budget Speech ever- 84 minutes. 
  • Electronic manufacturing to Rs 40,000 cr.
  • Eleven mentions of AI in the speech. 
  • 3 dedicated chemical parks to enhance domestic production and reduce import dependency.
  • TReDS is a transaction platform for all purchases from MSMEs by central public sector enterprises. 
  • Khelo India Mission to transform sports sector over the next decade.
  • The budget was again read from a digital tablet. 
  • Odisha, T.N., Andhra, and Kerala to get dedicated rare earth corridors to promote research and mining. 
  • Integrated programme to boost the textile sector.
  • Revive 200 legacy industrial clusters. 
  • Carbon capture, utilisation and storage.- Rs 20000 crore. 
  • ₹100 crore incentives for municipal bonds and restructuring of key public financial institutions.
  • NIMHANS 2.0- Ranchi and Tezpur.
  • Dedicated East Coast Industrial corridor
  • Buddhist Corridor
    • Arunachal, Sikkim, Assam, Manipur, Mizoram, and Tripura
  • Seven high-speed rail corridors will be developed as growth collectors. 
    • Mumbai-Pune
    • Pune-Hyderabad 
    • Hyderabad-Bengaluru
    • Hyderabad-Chennai
    • Chennai-Bengaluru
    • Delhi-Varanasi
    • Varanasi-Siliguri.
  • Promote India as a hub for Medical-value tourism.
    • Five regional medical hubs to be set up to boost medical tourism in the country.
    • Allocation to AYUSH Ministry sees 20% increase.
    • 1,000 accredited Indian Clinical Trial sites. 
  • FM Nirmala Sitharaman announces a 6-month foreign asset disclosure scheme for small taxpayers.
  • Restore the glory of sandal wood ecosystem.
Taxation
  • Offers a tax holiday for foreign cloud service companies using Indian data centres, promoting investment and infrastructure.
  • Simplifies customs duties, cuts personal import tariffs to 10%
  • Removal of Interest Deduction against Dividend and Mutual Fund Income. 
  • TCS decreased from 5% to 2%. 
  • Capital Gains Exemption for Sovereign Gold Bonds.
  • Slashes customs duties on 17 cancer drugs, eases baggage rules.
  • Securities Transaction Taxes for derivatives on futures and options trade increased.
  • Tax exemption on capital goods used to make lithium-ion cells for battery storage. 
Other allocation highlights
  • Pradhan Mantri Kisan Samman Nidhi (PMKisan): Rs. 63,500 crore
  • Startup India Fund of Funds 2.0 - Rs. 900 crore
  • Saksham Anganwadi and Poshan 2.0- Rs. 23,100 crore.
  • Grants-in-aid to National Co-operative Exports Limited (NCEL) - Rs. 450 crore.
  • PM One Nation One Subscription (PMONOS) - Rs. 2,200 crore
  • Control of Pollution - Rs. 1,091 crore
  • Vibrant Villages Programme Phase-II - Rs. 300 crore
  • PM SETU- Rs. 6,141 crore
  • Metro projects: Rs. 28,740 crore
  • Pradhan Mantri Viksit Bharat Rozgar Yojana: Rs. 20,083 crore
  • I-B Ministry; funds for Prasar Bharati, to support radio movement- ₹4,551 crore 
Cheaper vs Expensive 


Criticisms 

Experts have said that this is a pro-rich and pro-corporate budget. Shashi Tharoor mentioned that there was nothing for the states. Opposition Leader Rahul Gandhi called the Union Budget 'blind to India's real crises'. He insisted that the budget doesn't address the structural issues. Kerala's long-term request of All India Institute of Medical Sciences (AIIMS) remained unfulfilled.

Analysis 
PM Modi mentioned that this budget reflects “Nari Shakti” and that India is on a Reform Express. We can see that there is a massive push for infrastructure, startup culture, boosting consumer confidence, and growth-oriented incentives and programmes. Addtionally there has been little emphasis on election-bound states, unlike the previous budgets. Continuing on the tax cuts last year, the Modi govt. has once more continued to cheer the middle class and gain the acceptance of the larger public. Mention of AI and Semiconductors clearly shows the direction where the govt wants to emphasize certain sectors as such. 

Credits- MoneyControl, The Hindu

https://www.indiatvnews.com/news/india/give-me-the-facts-on-which-you-re-basing-your-argument-sitharaman-counters-rahul-s-budget-jibe-union-budget-2026-news-2026-02-01-1028485

https://www.moneycontrol.com/budget/budget-highlights-2026-live-nirmala-sitharaman-india-budget-speech-highlights-liveblog-13802209.html

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