India Union Budget 2026-27 Explained Live Updates: Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026 today. (Express photo by Tashi Tobgyal)Budget 2026 Explained Live Blog: Finance Minister Nirmala Sitharaman has finished presenting the Budget for the financial year April 2026 to March 2027. The focus this year was on providing incentives for manufacturing, specially in the MSME space. There was clear acknowledgement of the need for creating job opportunities. The FM also provided a slew of custom duty cuts to boost exports. Tier 3, tier 3 cities also came in for attention.
Last year’s Budget bet big on an unprecedented tax bonanza to push flagging consumption. It also continued the thrust on capital expenditure to maintain the growth momentum. The Budget’s headline announcement was the removal of tax liability for those earning up to Rs 12 lakh.
It is unclear if this year’s Budget will have a similar big bang tax announcement. But the key macro issues over the year provide some clues about the issues that Sitharaman may seek to address. Of particular concern is the drying up of foreign capital inflows, which was also flagged by the Economic Survey. This is something that has had a direct effect on the value of the rupee over the course of the year. Then there is the familiar concern over the lack of private corporate investment.
This Budget doesn't have a big-ticket tax break like last year, but it does have small tweaks and announcements that could impact you. Here's the list.
India’s creative industry found mention in Union Finance Minister Nirmala Sitharaman’s Budget speech on Sunday, as she announced plans to boost the country’s ‘orange economy’. What is orange economy, where is the term from, and what announcements related to it were made in the Budget? We explain
The first phase of the India Semiconductor Mission (ISM), launched in 2021, focused on setting up fabrication and assembly plants.
Now, ISM 2.0 allows the government to have an expanded focus beyond fabs — covering semiconductor equipment, materials, chemicals, design tools, R&D and training and supply-chain resilience.
Our explainer details why this sends an important signal for India’s semiconductor ambitions.
From concessions for SEZs to more duty-free imports for labour-intensive sectors, here is what Finance Minister Nirmala Sitharaman outlined in her Budget speech.
Finance Minister Nirmala Sitharaman announced the Biopharma SHAKTI scheme as part of the Union Budget 2026, aiming to make India a global manufacturing hub for biopharma.
“India’s disease burden is observed to be shifting towards non-communicable diseases, like diabetes, cancer and autoimmune disorders,” she said, adding that biological medicines are key to longevity and quality of life at affordable costs.
What does the scheme entail, and why was it announced now? We explain here.
Finance Minister Nirmala Sitharaman has announced that seven more high-speed rail corridors will be developed as "growth connectors" in all four directions of the country.
"For an environmentally sustainable system, we will develop seven high-speed rail corridors between cities as growth connectors, namely Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Siliguri," said Sitharaman in her Budget speech on Sunday.
India is currently developing its first high-speed rail corridor, the bullet train project, between Mumbai and Ahmedabad.
To understand why the Railways are a key part of the Centre's capital expenditure push, read our explainer here.
Finance Minister Nirmala Sitharaman Sunday proposed the constitution of a high-level committee to comprehensively review the banking sector and align it with the country’s next phase of growth.
“At this juncture, we are well placed to futuristically evaluate the measures needed to continue on the path of reform-led growth of this sector. I propose setting up a high-level committee on banking for Viksit Bharat to comprehensively review the sector, and align it with India’s next phase of growth, while safeguarding financial stability, inclusion and consumer protection,” she said.
To understand the move, read our explainer here.
In her Budget speech on Sunday (February 1), Finance Minister Nirmala Sitharaman proposed an outlay of Rs 20,000 crore over the next five years in Carbon Capture Utilisation and Storage (CCUS) technologies.
CCUS refers to reducing atmospheric emissions of carbon dioxide. Here are three things to know about the concept, how the Indian government has viewed it, and the debate over it.
In her Budget 2026-27 speech, Union Finance Minister Nirmala Sitharaman proposed establishment of dedicated rare earth corridors in India’s coastal states Odisha, Kerala, Andhra Pradesh and Tamil Nadu. The finance minister said the proposal is in line with the recently announced scheme to promote manufacturing of Sintered Rare Earth Permanent Magnets (REPM), with financial outlay of Rs 7,280 crore. To know more, read our explainer here.
Sitharaman said, "There are honest taxpayers who are willing to settle disputes by paying all their dues. But they get deterred due to negative connotation associated with penalty. They will now be able close cases by paying an additional amount in lieu of penalty."
For goods imported for personal use, the Finance Minister has proposed to reduce the tariff rate to 10% from 20% for all dutiable goods. This, she said, is for ease of living purposes.
The proposed hike in the Securities Transaction Tax on futures and options has seemingly not gone down well with the stock market, with the Nifty 50 index of the NSE and the BSE’s Sensex both now down more than 1%.
More on the stock market: the Finance Minister has proposed to tax buybacks for all types of shareholders as capital gains in the interest of minority shareholders. However, to disincentivise misuse of tax arbitrage, promoters of companies will pay an additional buyback tax. This will make effective tax 22% for corporate promoters and 30% for non-corporate promoters.
FM Sitharaman announces a hike in Securities Transaction Tax (STT) on futures to 0.05% from the current 0.02%. STT on options to be hiked to 0.15% from 0.1%, and on exercise of options to be raised to 0.15% from 0.125%.
To boost investment in data centres, government proposes to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally from data centres in India. However, it will need to provide services to Indian customers via Indian resellers, says FM Sitharaman.
Simplified Income Tax rules and forms will be notified shortly, announces FM Sitharaman. The forms have redesigned such that ordinary citizens can comply without difficulty. The new rules and forms follow the comprehensive review of the Income Tax Act, 1961, which was announced in July 2024. The Income Tax Act, 2025 will come into effect from April 1, 2026, Sitharman said.
The Centre is set to borrow Rs 17.2 lakh crore on a gross basis in 2026-27, up from Rs 14.8 lakh crore budgeted for 2025-26. This will be the biggest component of the Centre’s fiscal deficit financing. The sharp increase in the gross market borrowing of the government – which it does by issuing bonds, which are then bought by institutions like banks and insurance companies as well as foreign investors, among others – is due to a big jump in the repayment of past debt that matures in 2026-27. As per latest data, the Centre needs to pay back loans of as much as Rs 5.47 lakh crore next year. Netting for these repayments, the market borrowing is broadly steady at Rs 11.7 lakh crore. Going forward, the Centre’s debt repayments will rise even more and go up to Rs 9.06 lakh crore in 2030-31. Large government borrowing influences interest rates in the economy and can have an impact on private investments, as fewer funds are available for companies to borrow.
As recommended by the 16th Finance Commission, Rs 1.4 lakh crore allocation to states as Finance Commission grants for 2026-27 announced by FM Sitharaman. These include urban and rural local body, and disaster management grants. The FM said that the government has accepted the recommendations of the 16th Finance Commission. The report was submitted to the President in November 2025, and was tabled in Parliament today.
The achievement of the fiscal deficit target of 4.4% of GDP for the 2025-26 means the Indian government has met its promise of reducing the deficit to below 4.5%. Going forward, the Centre’s fiscal consolidation roadmap will see a change in the target metric to its debt-to-GDP ratio, with the objective being to reduce it to 50%, in a range of 49-51%, by 2030-31. For 2026-27, the debt-to-GDP target is 55.6%, down from 56.1% in 2025-26, with the fiscal deficit target set at 4.3% for the net fiscal.
The Economic Survey for 2025-26, presented earlier this week on Thursday, had said the debt-to-GDP target is a “concrete commitment with a specific date” which also affords the government “flexibility to fine-tune fiscal policy in response to emerging needs in the intervening period” at a time when the geopolitical and geoeconomic environment is volatile and unpredictable.
With the FM announcing a Rs. 12.2 lakh crore allocation for capital expenditure in the financial year 2026-27, the road transport and highways sector, alongside Railways, continues to be a primary driver of India’s infrastructure. The two sectors accounted for over 50 percent of Centre's total capital expenditure last fiscal. In the financial year 2024-25, the total capital expenditure of Road Transport and Highways, and Railways was Rs. 2.85 lakh crore and Rs. 2.52 lakh crore respectively. The overall capex by the centre was Rs. 10.52 lakh crore during the period
Amid concern over capital outflows, Budget proposed hiking the overall investment limit for Persons Resident Outside India (PROIs) to 24% from 10% and individual investment limit to 10% from 5%. FM Sitharaman said persons outside India can participate in India’s growth story through listed equity, under the Portfolio Investment Scheme. There will also be a comprehensive review of Foreign Exchange Management Act (FEMA) to create a more contemporary user-friendly framework for foreign investors.
The Economic Survey 2025-26, presented on Friday, had flagged the global capital strike, and its adverse impact on the rupee's stability, despite strong macroeconomic fundamentals. It had said the rupee is “punching below its weight”, with the rupee’s valuation does not accurately reflect India’s “stellar economic fundamentals”, which causes investors to pause. While an undervalued rupee helps offset the impact of higher US tariffs, the investor reluctance to commit to India warrants examination, the Survey had said.
To address lack of wide mental health care access in North India, Sitharaman announces a Nimhans 2, and upgradation of institutes in Ranchi and Tezpur
Around 45 mins into the budget presentation Stock markets remain unenthused— Despite initial announcements around manufacturing, infra development, capex increase and job creation premier indices — Sensex and Nifty — trading flat with no significant gains.
On corporate bond market, FM Sitharaman proposed to introduce a market making framework with suitable access to funds and derivatives on corporate bond indices. She also proposed to introduce total return swaps on corporate bonds. To encourage the issuance of municipal bonds of higher value by larger cities, an incentive of Rs 100 crore for a single bond issuance of more than Rs 1,000 crore is proposed. The existing scheme will continue to support smaller and medium towns, she announced.
PFC and REC to be restructured: In order to achieve scale and improve efficiency in public sector NBFCs, as a first step, it is proposed to restructure the Power Finance Corporation (PFC) and Rural Electrification corporation (REC), announced FM Sitharaman. She also said that the vision of NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption. Shares of PFC are up nearly 3.5% and those of REC more than 2% on the National Stock Exchange following the Finance Minister’s announcement.
There is clear acknowledgement of the need for creating job opportunities for the large number of young persons entering the workforce every year. From facilitating programmes that would train and provide skills to care givers, a big industry going forward, to setting up a committee to identify services sectors that aim to increase share of India’s services exports 10% by 2047, Finance Minister Nirmala Sitharaman has focused on many areas. Tourism is another area, where she said, skilling programmes for tourist guides would be conceived.
Sitharaman has announced a Rs 10,000-crore container manufacturing scheme amid the continued shortage and dependency of containers on China. Issues due to container shortages have persistently bugged traders since the COVID-19 pandemic. During the Board of Trade (BoT) meeting in November last year, Gujarat’s representative flagged the shortage of shipping containers and its impact on exporters. Assam’s representative said tea exports from the state face hurdles due to “shipping line levies for empty containers” in the context of the state being landlocked.
China is the largest exporter of containers and makes up 95 per cent of the large steel boxes globally. Much of the container manufacturing in China is done by a handful of highly subsidized state owned enterprises that have sparked security concerns in the US, EU, and India
Loan-linked capital support scheme to establish new veterinary colleges, collaboration with foreign institutes will be facilitated
The announcement of a high-level committee on banking for Viksit Bharat to comprehensively review the sector and align it for the next phase of growth comes amid banks finding it difficult to raise deposits. Just yesterday, on Saturday, State Bank of India Chairman CS Setty had called for tax parity between bank deposits and equity investments, saying that higher taxes on the former were making fund mobilisation difficult for banks as people put more and more of their savings in the stock market. The government also wants public sector banks to become globally competitive and is hoping at least 1-2 of them rank in the top-20 of the world by 2047
FM Sitharaman announces development of 7 high-speed rail corridors, which will be developed as “growth connectors”. These corridors will be: Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri.
Tier-2 and Tier-3 cities, and temple towns, will be in focus as FM announced sops for cities. The focus will be on modern infrastructure and basic amenities with an aim to further amplify the potential of cities to deliver the economic power of conglomerations by mapping 'City Economic Regions'. An allocation of Rs 5,000 crore per CER over the next five years has been proposed.
In line with the Carbon Capture Utilisation and Storage (CCUS) roadmap announced in December 2025, FM Sitharaman proposes an outlay of Rs 20,000 crore over five years as CCUS will achieve higher readiness and end-use applications across five industrial sectors in particular—power, steel, cement, refineries, and chemicals.
The 2026-27 capital expenditure target of Rs 12.2 lakh crore is up from Rs 11.21 lakh crore budgeted for the current fiscal and continues the Centre’s public investment ramp-up post the coronavirus pandemic. To put this new capex target in perspective, the Indian government had spent a mere Rs 3.08 lakh crore in 2018-19. As such, the latest target for the next fiscal marks an increase of almost four times in eight years.
FM Sitharaman proposes scheme to revive 200 legacy industrial clusters to improve their cost competitiveness and efficiency through infrastructure and technology upgradation. She also proposed a three-pronged approach to help MSMEs grow as “champions”, under which there will be a Rs 10,000-crore SME growth fund for equity support, and Self-Reliant India fund will be topped up with Rs 2,000 crore.
The 2026-27 capital expenditure target of Rs 12.2 lakh crore is up from Rs 11.21 lakh crore budgeted for the current fiscal and continues the Centre’s public investment ramp-up post the coronavirus pandemic. To put this new capex target in perspective, the Indian government had spent a mere Rs 3.08 lakh crore in 2018-19. As such, the latest target for the next fiscal marks an increase of almost four times in eight years.
We will launch Indian Semiconductor Mission 2.0 to produce eqiupment and materials, design full stack Indian IP and fortify supply chains, FM Sitharaman says. Electronics component manufacturing programme’s allocation to be nearly doubled from Rs 23,000 crore to Rs 40,000 crore. Government to help establish dedicated corridors in states like Odisha, Kerala, Andhra Pradesh and Tamil Nadu for manufacturing of rare earth magnets.
Amid US tariff trouble, Sitharaman announces support for the textile sector and MSMEs, including with equity and tech.
First: To accelerate and sustain economic growth by enhancing productivity and competitiveness, building resilience amid volatile global dynamics.
Second: Fulfil aspirations of people and build their capacity, making them strong partners in India’s path to prosperity
Third: To ensure every family, community, region, sector has access to resources and opportunities
To scale up manufacturing: Biopharma Shakti scheme gets outlay Rs 10,000 crore. Support for mineral rich states of Odisha, Tamil Nadu, a scheme to enhance chemical production and reduce imports. Rare earths and minerals are a key area where India is seeking import-independence
In addition to presenting the Union Budget for 2026-27, Finance Minister Nirmala Sitharaman has also accepted the recommendations of the 16th Finance Commission – headed by former Niti Aayog Vice Chairman Arvind Panagariya – for the next five fiscal years ending in 2030-31. The Finance Commission makes key recommendations that govern how much money states get as a percentage of the Central government’s divisible pool of tax revenues. Currently, 41% of the pool goes to states every year.
In addition to presenting the Union Budget for 2026-27, Finance Minister Nirmala Sitharaman has also accepted the recommendations of the 16th Finance Commission – headed by former Niti Aayog Vice Chairman Arvind Panagariya – for the next five fiscal years ending in 2030-31. The Finance Commission makes key recommendations that govern how much money states get as a percentage of the Central government’s divisible pool of tax revenues. Currently, 41% of the pool goes to states every year.
The Budget speech has begun, with the Finance Minister discussing the performance of the economy in the past few years, and emphasising the reforms initiated by the government.
Some of the specific recommendations made in the Economic Survey 2025-26, like concerning disinvestment through PSUs, could be among the focus areas of the upcoming Union Budget.
Click here read about the pointers flagged in the Survey.
On the face of it, the Budget for the new financial year should be a completely new exercise. One could imagine Finance Minister Nirmala Sitharaman pulling out a clean sheet of paper and deciding to make a totally new Budget for the new financial year. But in reality, that is rarely the case. More often than not, a new Budget has limited space — both monetary and policy — to fundamentally alter things.
Udit Misra broke down the basics of what the government sets out to do through the Budget exercise, and the three key challenges that the Indian economy is facing.
Earlier this week, the government released the annual Economic Survey of India.
At a time when India’s economic growth rate (often measured in terms of GDP) is being hotly debated, the survey (led by Chief Economic Advisor V Anantha Nageswaran) has “reassessed” and upped India’s “potential” economic growth rate from 6.5% to 7%.
Click here to read more about the concept, and what explains the government's positive outlook.
The government’s tax break in the previous budget, as well as the cuts in the GST rates, were essentially attempts to incentivise demand and create a business case for the private sector to invest in the economy. Despite that, private corporate investment has fallen from the pre-pandemic period.
The Economic Survey said the country is expected to grow by 6.8% to 7.2% in the next financial year. India’s nominal GDP growth rate, however, has been decelerating for years.
