Budget 2026:Finance Minister Nirmala Sitharaman presented her 9th consecutive Union Budget at the Lok Sabha today, marking the first time the Narendra Modi government's first Budget presentation on a Sunday. Presenting the Union Budget 2026-2027, Finance Minister Nirmala Sitharaman unveiled a "Yuva Shakti"-driven roadmap for "Viksit Bharat," grounded in the "Reform Express" agenda. Guided by three core "Kartavyas", accelerating growth, building capacity, and ensuring inclusive development, the budget balances fiscal prudence with a 4.3% deficit target.

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Budget 2026: Nirmala Sitharaman Full Speech

Click here to view the full PDF of FM Sitharaman's Budget Speech

Budget 2026: Top 10 Takeaways

Key highlights include the historic implementation of the Income Tax Act 2025, the "Biopharma SHAKTI" initiative, and strategic infrastructure investments to transform aspirations into achievement.

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Here are the top 10 takeaways from the Budget 2026-2027 speech:

Implementation of the New Income Tax Act, 2025

A comprehensive overhaul of the direct tax system will be implemented with the "Income Tax Act, 2025" coming into effect on April 1, 2026. Key changes include:

  • Buyback Taxation: The taxation on share buybacks is shifted from the company to the shareholder, where it will be taxed as Capital Gains. To prevent tax arbitrage, an additional tax is introduced for promoters, resulting in an effective tax rate of 22% for corporate promoters and 30% for non-corporate promoters.
  • Securities Transaction Tax (STT) Hike: To correct the Futures & Options (F&O) segment, STT on Futures will rise to 0.05%, and STT on options premium and exercise will increase to 0.15%.
  • Foreign Asset Disclosure: A "Foreign Assets of Small Taxpayers – Disclosure Scheme" (FAST-DS) will allow a one-time disclosure for undisclosed overseas assets (up to ₹1 crore) or disclosed assets with undeclared acquisition (up to ₹5 crore) by paying specific taxes and fees to gain immunity from prosecution.

Fiscal Discipline and Massive Capital Expenditure

The government maintains a path of fiscal consolidation while increasing public investment. The fiscal deficit target for FY 2026-27 is set at 4.3% of GDP, adhering to a commitment to reduce the deficit below 4.5% by 2025-26.

Simultaneously, public capital expenditure (capex) is increased to ₹12.2 lakh crore to sustain economic momentum. The government has also accepted the 16th Finance Commission's recommendation to retain the vertical share of tax devolution to states at 41%.

"Biopharma SHAKTI" and Strategic Manufacturing

To accelerate growth, the budget identifies seven strategic sectors for manufacturing scaling. A major initiative is Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation), with an outlay of ₹10,000 crore over five years to make India a global hub for biologics and biosimilars. Other manufacturing interventions include:

  • ISM 2.0: Expanding the India Semiconductor Mission to focus on equipment, materials, and Indian IP.
  • Rare Earths: Establishing dedicated corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.
  • Chemical Parks: Launching a scheme to support states in setting up three dedicated Chemical Parks.

Comprehensive MSME Support

"Champion SMEs" A three-pronged approach (Equity, Liquidity, Professional Support) is proposed to help MSMEs grow:

  • Equity: A ₹10,000 crore "SME Growth Fund" to incentivise select enterprises and a ₹2,000 crore top-up to the Self-Reliant India Fund.
  • Liquidity: The TReDS platform is mandated for all CPSE procurements from MSMEs, and credit guarantee support will be introduced for invoice discounting on TReDS.
  • Professional Support: Developing a cadre of "Corporate Mitras", accredited para-professionals to help MSMEs with compliance at affordable costs.

Infrastructure Expansion: Cities and Corridors

The budget introduces City Economic Regions (CER), allocating ₹5,000 crore per CER over five years to map and develop growth drivers in Tier II and III cities. Connectivity projects include:

  • High-Speed Rail: Seven new corridors are proposed, including Mumbai-Pune, Delhi-Varanasi, and Hyderabad-Bengaluru.
  • Freight & Waterways: A new Dedicated Freight Corridor from Dankuni to Surat and the operationalisation of 20 new National Waterways, including a specific focus on Odisha’s mineral-rich areas.
  • Urban Assets: A push to monetise Central Public Sector Enterprise (CPSE) real estate assets through dedicated Real Estate Investment Trusts (REITs).

Agricultural Modernisation and "SHE-Marts"

To increase farmer incomes and support rural enterprises:

  • AI in Agriculture: Launch of "Bharat-VISTAAR," a multilingual AI tool integrating AgriStack and ICAR data to provide customized advisory services.
  • High-Value Crops: Dedicated programs for coconut, cashew, and cocoa to enhance productivity and export competitiveness, aiming to make Indian Cashew and Cocoa premium global brands by 2030.
  • Rural Entrepreneurship: Establishment of "SHE-Marts",community-owned retail outlets to support women-led enterprises, building on the Lakhpati Didi Programme.

Services Sector and Skilling for "Viksit Bharat"

A High-Powered "Education to Employment and Enterprise" Standing Committee will be set up to drive the services sector to a 10% global share by 2047. Specific measures include:

  • Healthcare: Creating five Regional Medical Hubs for medical tourism and training 100,000 Allied Health Professionals over five years.
  • Creative Economy: Setting up AVGC (Animation, Visual Effects, Gaming, Comics) Content Creator Labs in 15,000 schools and 500 colleges.
  • University Townships: Supporting states to create five academic zones near industrial corridors.

Customs Rationalisation for Trade and Energy

The budget simplifies the tariff structure and reduces duties to support domestic manufacturing and energy transition:

  • Critical Minerals: Basic customs duty exemption for capital goods required for processing critical minerals.
  • Energy: Duty exemptions for goods used in Nuclear Power Projects (extended to 2035) and for manufacturing Lithium-Ion Cells for battery storage systems.
  • Trade Facilitation: The value cap of ₹10 lakh on courier exports is removed to aid e-commerce, and the duty deferral period for Tier 2 and 3 Authorised Economic Operators (AEOs) is extended from 15 to 30 days.

Ease of Doing Business and Decriminalisation

Significant steps are taken to reduce litigation and compliance burdens:

  • Decriminalisation: Non-production of books of accounts and TDS payment defaults (where payment is made in kind) are decriminalised. Maximum imprisonment for remaining offences is reduced to two years, with provisions for compounding offences.
  • Digital Clearance: A single, interconnected digital window for cargo clearance involving all government agencies (food, drugs, wildlife) will be operational by April 2026.
  • Assessment & Penalty: Assessment and penalty proceedings will be integrated into a common order to reduce the multiplicity of proceedings.

Regional Development

Purvodaya and North-East Targeted interventions for the Eastern and North-Eastern regions include:

  • Industrial Corridor: Development of an integrated East Coast Industrial Corridor with a node at Durgapur.
  • Tourism: Creation of five tourism destinations in Purvodaya states and a "Buddhist Circuits" scheme for North-Eastern states to preserve monasteries and improve connectivity.
  • Design Education: Establishment of a new National Institute of Design in the eastern region.