Key Highlights – FY26–27

Infrastructure & Connectivity

• The government has proposed the development of seven high-speed rail corridors—Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru, Hyderabad–Chennai, Chennai–Bengaluru, Delhi–Varanasi, and Varanasi–Siliguri—with the objective of promoting environmentally sustainable and efficient passenger mobility.
• Continued emphasis on infrastructure development in Tier II and Tier III cities, aimed at supporting urbanisation, regional growth, and MSME expansion.

Financial Sector & Capital Markets

• A high-level committee on banking will be constituted under the Viksit Bharat framework to review the entire banking ecosystem and recommend reforms to support India’s next phase of economic growth.
• The investment limit for NRIs has been increased from 5% to 10%, while the overall sectoral investment limit has been raised to 24% from 10%, enhancing foreign participation.
• The securities transaction tax (STT) on options has been proposed to be increased from 0.1% to 0.15%.
• For FY27, the fiscal deficit is budgeted at 4.3% of GDP, while the revised estimate for FY26 stands at 4.4%, reinforcing the fiscal consolidation roadmap.

MSMEs, Manufacturing & Self-Reliance

• The government has proposed a ₹4,000 crore top-up to the Self-Reliant India Fund in FY27 to strengthen MSME financing and growth.
• A ₹10,000 crore outlay under the Bio-Pharma Strategy has been announced to boost innovation, domestic manufacturing, and global competitiveness in pharmaceuticals.

Energy Transition & Sustainability

• An outlay of ₹20,000 crore over the next five years has been announced for Carbon Capture, Utilisation, and Storage (CCUS) technologies, aimed at scaling deployment and improving readiness levels across end-use applications.

Healthcare & Social Development

• Customs duty exemption on 17 cancer drugs has been announced to improve affordability and access to critical treatments.
• Upgradation of AYUSH pharmacies and drug-testing laboratories to strengthen quality assurance and healthcare delivery.

Tourism, Culture & Skill Development

• The government will launch a pilot scheme to upgrade the skills of 10,000 tourist guides across 20 iconic tourist sites.
• Plans to develop ecologically sustainable tourism trails in Himachal Pradesh, Uttarakhand, and Jammu & Kashmir, promoting responsible tourism and local employment.

Trade & Tax Rationalisation

• The tariff rate on imports of personal goods has been reduced from 20% to 10%.
• The Tax Collected at Source (TCS) rate on liquor, scrap, and minerals has been rationalised to 2%, easing compliance and improving cash flows for businesses.

Budget proposed to rationalise definition of accountants for safe harbour rules to promote home-grown accounting firms.

Tax collected at source rate on liquor, scrap and mineral rationalised to 2%.

Exempt basic customs duty on components and parts required for the manufacturer of civil training and other aircraft.

Reduce tariff rate on personal goods imports from 20% to 10%.

Exemption of BCD on parts of microwave ovens.

Custom Duty Exemption on 17 drugs related to cancer.

People of Indian origin living abroad have been allowed to invest in Indian equities via a Portfolio Investment Scheme. Individual PROI limit raised from 5% to 10%, and the overall cap increased to 24% from 10% currently.

Buybacks to be taxed as Capital Gains across all shareholder categories.

STT raised on Futures to 0.05 from 0.02; capital market stocks down sharply.

Declared tax holiday till 2047 for any global company providing cloud services to global clients using Indian data centres.

There is also relief for students and patients. The TCS rate under the Liberalised Remittance Scheme (LRS) for education and medical expenses abroad will be reduced from 5% to 2%, making it easier for families sending money overseas for these needs.

Gross Market Borrowing for FY27 is pegged at Rs 17.2 lakh crore, far higher than what market feared. Bond yields may climb on Monday and the RBI will be pushed to become a big buyer for another year.

Misreporting of income will attract a penalty equal to 100% of the tax amount.

Income Tax Act, 2025, to be implemented from April 1: Rules and tax returns forms to be notified.

Introduced 6-month foreign asset disclosure scheme for tax payers.

The capex growth 10.9% for FY27, positive for infrastructure sector and better than market expectations.

TDS on LRS for purpose of education reduced.

TCS rate on overseas tour package reduced from 5-20% to 2%.

Gross market borrowing estimated at 17.2 lakh cr, higher than estimates.

Debt to GDP ratio for FY27 at 55.6 percent in the Budget.

Fiscal deficit retained at 4.3% of GDP for FY26.

Debt to GDP to be 55, fiscal deficit for FY27 4.4% of GDP.

Govt. has accepted recommendation to retain 41% share for states; Rs 1.4 lakh crore for states in FY27 as SFC grants.

Support Artificial Limbs Manufacturing Corporation of India, as input to set up and to scale up production of assisted devices, invest in R&D and AI.

Introduce She-Mark for women entrepreneurs to help access to credit linked products and innovative financial instruments.

Budget’s allocation of Rs 20,000 crore over 5 years for carbon capture to make export of Steel, Chemicals competitive in Europe.

Centre to support states in setting up five hubs for medical tourism.

Budget proposes to support Indian Institute of Creative Technologies Mumbai for setting up content labs in 15,000 secondary schools.

Proposed to launch Bharat Vista Multi-lingual AI Tool.

Centre to continue focus on developing infrastructure in cities with over 5 lakh population.

Other announcements include upskilling guides, enhance trekking experience in some states, Turtle trail, Birdwatching trail and 15 archaeological sites.

National Institute of Hospitality to bridge gap between academia, industry and govt.

Digital Knowledge Grid will be established to document all places of significance. This will create new ecosystem of jobs for local researchers, historians and technology partners.

Create 1.5 lakh care givers for geriatric and NSQF aligned programs.

FM announced to create 1 lakh Allied Health Professionals (AHPs) in 10 disciplines like optometry, radiology, anaesthesia and more over the next 5 years.

EMS stocks gain on 40,000 cr outlay for Electronic Component Scheme.

Loan linked capital subsidy support scheme for vet colleges.

The Union Budget 2026 emphasizes on boosting port and rail connectivity through enhanced infrastructure development with a capital outlay of RS 10, 000 crore over the next 5 years.

Increase in overall investment limit for Persons of Indian Origin from 10% to 24%. The aim is to trigger foreign portfolio flows.

Tourism sector will play a large role in creating employment.

Carbon mitigation is a key ESG factor for steel companies, such as Tata Steel, JSW Steel. A Rs 20000 crore allocation for such projects over 5 years.

FY 26-27 proposed Rs 10,000 crore SME fund. Mid-sized and smaller banks to benefit.

Announcement of a new transport corridor across Tamil Nadu, Odisha, Andhra Pradesh, and Kerala.

Close to 25 crore people have already come out of multidimensional poverty,

Proposal to set up high-powered education to employment and enterprise innovation standing committee to recommend measure that focus on services sector.

Outlay of Rs 20,000 cr proposed for launch of carbon capture and utilisation scheme across sectors like steel and cement.

The FM proposed the idea of setting up mega textile parks with focus on value addition to technical textiles.

Make TReDS as transaction platforms for all purchases from MSMEs by central public sector enterprises.

New seven high-speed rail corridors between cities - Mumbai to Pune, Pune to Hyderabad, Hyderabad to Chennai, Delhi to Varanasi, Varanasi to Siliguri.

Individual Residents living ouside India can invest in Indian Equities through Portfolio Investment Scheme.

FM proposed to restructure Power Finance Corp and Rural Electrification Corp.

Sitharaman proposed an incentive of Rs 100 crore for a single bond issuance of more than Rs 1,000 crore.

Will continue to develop infrastructure in Tier 2, Tier 3 cities.

Proposed to operationalise 20 new waterways starting with one in Odisha.

7 high-speed rail corridors to be constructed.

The capex to be increased to Rs 12.2 lakh crore.

Rejuvenation of 200 legacy industrial clusters.

India has enough potential to emerge as a global hub for sports goods.

FM proposes a three-pronged approach to help MSMEs grow - equity support via MSME growth fund.

Rs 10,000 crore SME growth fund to create champions among MSMEs.

Container manufacturing scheme with Rs 10,000 crore for over 5 years.

Mahatma Gandhi Gram Swaraj Initiative to be launched soon.

FM announces textile labour incentive scheme, and national handloom and handicrafts programme in this Budget.

Rs. 40,000 cr for pushing semi-conductor manufacturing.

The budgeted fiscal deficit for fiscal 2026 is estimated at 4.4 per cent of Gross Domestic Product (GDP).

The government's planned capital expenditure for this fiscal year is budgeted at Rs 11.2 lakh crore.

Plan 10,000 cr Bio Pharma Strategy Outlay

Scale up manufacturing in 7 strategic sectors, create champion MSMEs, and deliver powerful push to infra.

Cutting-edge technologies, including AI, to serve as growth multipliers.

The 2026 Budget will highly focus on Youth. Better described as 'Youth-led Budget 2026.