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Informist, Sunday, Feb. 1, 2026

 

MUMBAI - Highlights of the Union Budget for 2026-27 (Apr-Mar), presented by Finance Minister Nirmala Sitharaman in Lok Sabha on Sunday:

 

FISCAL HEALTH

* Policy decisions enabled strong macroecon stability

* India's trajectory marked by sustained growth, moderate inflation

* Modi govt decisively chosen action over ambivalence

* Govt steps have helped improve lives of people

* We now face a challenging external environment

* New tech transforming production systems, raising water demand

* India will continue to take confident steps

* India must be integrated with global markets

* India to balance ambition with inclusion
* Aim is to transform aspiration into achievement
* India seeing expanding trade with rising capital needs
* To ensure long-term econ stability

* Govt has chosen reform over rhetoric

* Govt has chosen people over populism

* Built domestic domestic mfg capacity, energy security

* Ensured citizens benefitted from reforms

* Govt steps have helped reduce poverty

* This is a Yuva Shakti-driven Budget

* To focus on poor, underprivileged, disadvantaged sections

* Inspired by 3 duties, accelerate econ growth

* To build resilience to volatile global uncertainty

* Duty is to fulfill aspirations of people

* Govt steps have delivered high growth rate of around 7%

 

FY27 ESTIMATES

* FY27 fiscal deficit pegged at 4.3% of GDP

* FY27 debt-to-GDP ratio seen 55.6% of GDP

* Debt-to-GDP reduction to cut interest payments
* FY27 total expenditure seen at INR 53.5 tln
* FY27 capital expenditure seen at INR 12.2 tln
* Peg FY27 net tax receipts INR 28.7 tln
* FY27 net market borrowing pegged at INR 11.7 tln
* FY27 gross market borrowing pegged at INR 17.2 tln
* FY27 nominal GDP growth seen at 10% vs 8.0% estimated for FY26

* FY27 total expenditure seen at INR 53.473 tln

* FY27 fiscal deficit pegged at 4.3% of GDP

* FY27 fiscal deficit pegged at INR 16.958 tln

* FY27 gross tax mop-up seen INR 44.041 tln

* FY27 CGST mop-up seen at INR 10.190 tln

* FY27 customs mop-up seen at INR 2.712 tln

* FY27 income tax mop-up seen at INR 14.660 tln

* FY27 food subsidy seen at INR 2.28 tln

* FY27 corporate tax mop-up seen at INR 12.310 tln

* FY27 revenue deficit seen at 1.5% of GDP

* FY27 petroleum subsidy seen at INR 120.85 bln

* FY27 net short-term borrowing pegged at INR 1.30 tln

* FY27 fertiliser subsidy seen at INR 1.708 tln

* FY27 revenue deficit pegged at INR 5.923 tln

* FY27 primary deficit pegged at INR 2.918 tln

* FY27 borrowing from small savings seen at INR 3.87 tln

* FY27 food subsidy seen at INR 2.276 tln

* FY27 petroleum subsidy seen at INR 121 bln

* FY27 gilt switches pegged at INR 2.50 tln

* FY27 fertiliser subsidy seen at INR 1.708 tln

* FY27 gilt buybacks pegged at nil

* FY27 gilt repayments pegged at INR 5.468 tln

* FY27 RBI surplus, PSU financial cos dividend seen at INR 3.16 tln

* FY27 RBI surplus, PSU financial cos dividend seen at INR 3.16 tln

* FY27 dividend from PSU cos seen at INR 750 bln

* FY27 PSU capex pegged at INR 10.190 tln

* FY27 defence spending seen at INR 5.946 tln

* FY27 miscellaneous capital receipts pegged at INR 800 bln

* FY27 pension outgo seen at INR 2.962 tln

* FY27 net drawdown on cash seen at INR 327.02 bln

* Pegs FY27 MGNREGA outlay INR 300 bln vs revised INR 880 bln FY26

* FY27 total transfer to states seen INR 10.945 tln

* Pegs FY27 VB-G RAM G outlay at INR 956.92 bln

* FY27 states' tax share pegged at INR 15.263 tln

* FY27 outlay for NHAI pegged at INR 1.873 tln

* FY26 revised outlay for NHAI pegged at INR 1.703 tln

* FY27 effective total transfer to states seen INR 26.208 tln

* FY27 interest payments seen INR 14.040 tln

* FY27 total resources for states via fin panel route INR 16.56 tln

* FY27 interest-free capex loan to states seen at INR 1.85 tln 

* To accept all recommendations of 16th Finance Commission
* Govt accepts 16th Finance Commission proposal for 41?volution to states
* To retain tax devolution to states at 41%
* Provided INR 1.4 tln for states for FY27 as fin panel grants

 

FY26 REVISED

* Debt-to-GDP ratio estimated at 56.1% for FY26
* FY26 fiscal deficit seen 4.4% of GDP vs 4.4% of GDP Budget aim
* Have fulfilled commitment to cut fiscal deficit below 4.5%
* Fiscal deficit for FY26 estimated at 4.4% of GDP
* FY26 total expenditure revised to INR 49.6 tln
* FY26 RE for net tax receipts INR 26.7 tln

* FY26 total expenditure revised to INR 49.648 tln

* FY26 fiscal deficit retained at 4.4% of GDP

* FY26 fiscal deficit seen INR 15.585 tln vs INR 15.689 tln Budget aim

* FY26 gross tax mop-up revised to INR 40.778 tln vs INR 42.702 tln

* FY26 CGST revised to INR 9.585 tln vs INR 10.109 tln

* FY26 CGST mop-up revised to INR 9.585 tln vs INR 10.109 tln

* FY26 customs mop-up revised to INR 2.583 tln vs INR 2.40 tln

* FY26 income tax mop-up revised to INR 13.120 tln vs INR 14.380 tln

* FY26 gross mkt borrow seen INR 14.61 tln vs INR 14.82 tln Budget aim

* FY26 food subsidy seen INR 2.282 tln vs INR 2.034 tln Budget aim

* FY26 net market borrow INR 11.33 tln vs INR 11.54 tln Budget aim

* FY26 corporate tax mop-up revised to INR 11.09 tln vs INR 10.82 tln

* FY26 petroleum subsidy seen INR 151.21 bln vs INR 121 bln Budget aim

* FY26 net short-term borrowing seen nil

* FY27 primary deficit seen at 0.7% of GDP

* FY26 fertiliser subsidy seen INR 1.86 tln vs INR 1.68 tln Budget aim

* FY26 food subsidy seen INR 2.282 tln vs INR 2.034 tln Budget aim

* FY26 petroleum subsidy seen INR 151 bln vs INR 121 bln Budget aim

* FY26 fertiliser subsidy seen INR 1.87 tln vs INR 1.68 tln Budget aim

* FY26 gilt buybacks seen INR 867.75 bln

* FY26 RBI surplus, PSU financial cos dividend seen at INR 3.046 tln

* FY26 RBI surplus, PSU financial cos dividend seen at INR 3.046 tln

* FY26 PSU cos dividend seen INR 710 bln vs INR 690 bln Budget aim

* FY26 PSU capex revised to INR 9.117 tln vs INR 9.666 tln budgeted

* FY26 defence spending revised to INR 5.679 tln vs INR 4.917 tln

* FY26 miscellaneous capital receipts seen INR 338 bln

* FY26 pension outgo revised to INR 2.866 tln vS INR 2.766 tln

* FY26 net cash drawdown seen INR 457 bln vs INR 24.8 bln Budget aim

* FY26 capex loan to states cut to INR 1.44 tln from INR 1.50 tln 

 

TAX REFORMS

* New Income Tax Act to be implemented Apr 1
* New income tax act forms to be notified shortly
* To reduce TCS rate under LRS to 2% for education, medical purposes
* To bring supply of manpower svcs under tax deducted at source
* Propose scheme for small tax payers
* To extend time to revise returns to Mar 31 with small fee
* Moot to stagger timeline for filing tax returns
* Moot ITR-1, ITR-2 filing deadline Jul 31
* To deduct TDS on sale of immovable properties by non-residents
* Moot tax filing deadline for non-audit trusts Aug 31
* New foreign asset disclosure scheme for students, young professionals
* To integrate assessment, penalty proceedings
* To cut minimum payment to 10% from 20% of core tax demand
* To rationalise prosecution under Income Tax Act
* Propose to rationalise prosecution framework under Income Tax Act
* To decriminalise non production of books of accounts under Income Tax
* Moot immunity from prosecution on non-disclosure of some foreign assets
* 15.5% common safe harbour margin for all IT services
* Safeharbour for IT svcs by automatic process without officer
* To up threshold of IT svcs safe harbour norms to INR 20 bln
* To fast track advance tax ruling process for IT svcs cos to 2 years
* Tax holiday to cos till 2047 for cloud svcs from India data centres
* Moot 15% safeharbour for cos related to Indian co for data centres
* To provide safe harbour to electronic makers at 2% profit margin
* To exempt tax on toll manufacturers providing capital goods
* Moot exemption from MAT for NRI paying tax on preventive basis
* No tax on non-India income for foreigners staying in India for 5 yrs
* To rationalise definition of accountants for safe-harbour rules
* To tax buyback of shares as capital gains
* Moot taxing buybacks for all shrholders as capital gains
* Promoters to pay extra buyback tax
* Promoters to pay additional tax on share buybacks
* To raise STT on futures to 0.05%
* STT on options premium, trading to 0.15% from 0.1%
* Moot brought forward MAT credit for cos only in new tax regime
* Final MAT rate cut to 14% from 15%
* Aim to simplify customs duty structure
* Brought-forward MAT credit until Mar 30 will be available to set-off

* To remove customs exemptions on some items made in India
* Up duty-free import limit for seafood processing inputs to 3% value

* To extend time for final pdt exports to 12 mos for leather goods
* To extend BCD exemption on capital goods for lithium ion batteries
* To exempt BCD on sodium antimonate for solar glass
* To extend BCD exemption on nuclear power goods imports till 2035
* To exempt capital goods for critical minerals from basic customs cuty
* To exclude value of biogas blended CNG in central excise calculation
* Exempt BCD for parts of civilian training aircraft

* To exempt BCD on raw material for aircraft repair in defense sector
* To facilitate one-time sales by mfg units in SEZs to domestic areas
* To cut tariff on dutiable goods for personal use to 10% from 20%
* Concessional duty for SEZ mfg exports subject to ceiling of sales
* To exempt 17 anti-cancer drugs from basic customs duty
* Propose measures to smoothen customs process
* To up duty period for tier-2, tier-3 AEOs to 30 days from 15 days
* To minimise cargo verification process for regular importers
* To give sops to AEOs; no compliance burden for customs clearance
* To change customs warehouse framework to warehouse operating system
* To set up single digital window by year-end for cargo clearance
* New framework to allow cargo clearance for food, drugs, animal pdts
* Quicker cargo clearance for food, drugs, animal pdts from Apr 1
* Use of non-invasive scanning to be expanded at major ports
* Customs integrated system in 2 yrs as single platform for all steps
* No duty on fish catch by Indian vessel in exclusive econ zones

* Fish landing in foreign ports from India EEZ to be treated as export

* To revise provisions for baggage clearance during intl travel

* Taxpayers can close cases by paying extra in lieu of penalty

INFRASTRUCTURE

* To develop city economic regions

* Aim to deliver powerful push for infrastructure

* To set up infra risk guarantee fund
* To recycle PSU real estate assets via special REITS
* To operationalise 20 new waterways over next 5 years
* To connect mineral-rich areas in Odisha via waterways
* To set up training institutes to train youth for waterways

* To set up ship repair ecosystem at Varanasi, Patna
* To launch coastal cargo promotion scheme
* To launch coastal shipping scheme to up coastal trade to 12% by 2047

* To map city econ regions based on specific growth drivers
* To give INR 50 bln for city econ regions scheme

 

MANUFACTURING

* To scale up mfg in seven sectors

* To scale mfg in bio pharma shakti

* Aim to develop India as global pharma manufacturing hub

* Bio pharma shakti will build ecosystem for mfg of biologics

* Propose INR 100 bln under biopharma shakti for 5 yrs

* To strengthen central drug standard organisation

* To build 3 new pharma institutions under bio pharma shakti plan

* Propose India Semiconductor Mission 2.0

* To launch second plan to develop semi-conductors sector

* Propose to up electronics components mfg plan outlay to INR 400 bln

* Propose supporting Odisha, Kerala for rare earth corridors

* Propose supporting Andhra, Tamil Nadu for rare earth corridors

* To develop 3 dedicated chemical parks to cut import dependence

* CPSEs to set up hi-tech tool rooms for capital goods capability

* Propose scheme for enhancing mfg of construction, infra equipment

* Aim to mfg high quality, high tech infra equipment

* To allocate INR 100 bln for container manufacturing facility

* Propose programme with 5 sub-parts for textile sector

* Propose national fibre scheme under textile sector

* Moot textile expansion plan via capital support for machinery

* To ensure targetted support for weavers, artisans

* Moot textile expansion plan to modernise industry

* To set up mega textile parks in challenge mode

* To launch new plan to develop textile skilling system

* Moot Mahatma Gandhi Khadi Swaraj Initiative for handloom industry

* Khadi program to benefit weavers, villages, rural youth

* To promote sports goods manufacturing

* India has potential to emerge as hub for sports goods

* Moot Mahatma Gandhi Gram Swaraj Initiative for khadi industry

* Propose scheme to revive 200 legacy industry clusters

* Propose initiative for high quality sports goods

* Propose three-pronged approach to develop champion MSMEs

* To give INR 100 bln support to create MSME champions

* Propose INR 100 bln SME growth fund

* TReDS to serve as pricing benchmark for corporates

* To link GeM with TReDs for govt purchases

* Mandate TREDS as settlement platform for liquidity support to MSMEs

* ICAI, ICSI to make modular courses for skilling

* Moot affordable para-professionals to help MSMEs meet compliance needs

* To focus on developing infra in tier-II, tier-III cities

* To incentivise indigenised sea planes mfg for last mile connectivity
* Carbon capture use, storage system for steel, power, chem sectors
* Moot outlay of INR 200 bln for carbon capture plan over next 5 yrs
 

FINANCIAL SECTOR

* Banks now have strong balance sheets, cover 98% of our villages

* Banking sector has strong balance sheet, asset quality

* Propose setting up panel for banking for develop econ
* To set up high-level committee on banking for Viksit Bharat
* Well placed to evaluate reforms needed for banking sector growth
* Propose setting up panel to review banking sector for Viksit Bharat
* Propose to restructure PFC, REC

* Propose to restructure PFC, REC as part of public NBFC reform

* Propose comprehensive review of FEMA

* To review FEMA for friendly framework for foreign investors

* Propose review of FX debt instruments

* To set up mkt-making framework for corporate bond market

* To introduce total return swaps on corp bonds
* Moot incentive of INR 1 bln for single municipal bond issuance
* Persons outside India can invest in equity via portfolio plan
* Propose upping individual invest limit to 10% from 5% for PROIs
* Propose overall invest limit hike for PROIs to 24% from 10%

 

SERVICES SECTOR

* Aim for 10% share of global services sector by 2047
* To set up panel to recommend steps to boost services sector
* Svc sector panel to assess impact of emerging tech, AI on jobs
* To upgrade allied health institutes for professionals
* To develop NSQF-aligned programmed for multi-skilled caregivers
* To set up 5 regional hubs to promote medical tourism
* Moot scheme to aid states to set up medical hubs with pvt sector
* To train 150,000 caregivers in coming year
* Medical tourism hubs to have Aayush centres
* To set up 5 medical tourism regional hubs with pvt sector
* Moot setting up 3 new All India Institutes of Ayurveda
* To upgrade Ayush pharmacies, drug testing labs
* To updrade WHO traditional medicine centre in Jamnagar
* Moot loan-linked capital support scheme for veterinary training
* To set up new National Institute of Design in north east
* To set up 1 girls hostel in every district via viability gap fund
* To set up, upgrade 4 telescope facilities for astrophysics, astronomy
* Tourism sector has large role in creating employment
* Propose pilot scheme to train 10,000 guides from 20 tourism spots
* To upgrade hotel mgmt institute to national institute of hospitality
* National destination digital knowledge grid to make ecosystem of jobs
* To set up national destination digital grid for places of significance
* IIMs to undertake pilot plan to train guides via 12-week course
* Propose to develop 15 archaeological sites into cultural destinations
* Propose to launch Khelo India mission for sports sector for 10 yrs
* To empower vulnerable to access mental health care
 

FARM SECTOR

* To increase farmer income under inclusive development target
* To focus on development of north east to promote employment
* To empower divyangjan via high-quality devices, livelihood training
* To develop 500 reservoirs for fisheries sector
* To strengthen fisheries value chain in coastal areas
* To launch credit-linked subsidy programme for animal husbandry
* To support high value crops such as coconut, cashew in coastal areas

* Proposes special scheme to enhance coconut output
* Propose dedicated programme for self-reliance in cashew, cocoa
* To partner with states to promote cultivation of sandalwood
* To partner with states to promote processing of sandalwood
* To rejuvenate low-yielding orchards of walnuts, almonds, pinenuts
* To support incomes of walnuts, almonds, pinenuts farmers
* Propose to launch AI tool to boost agriculture, productivity
 

SOCIAL SECTOR

* To set up She-Marts to help women turn into owners of enterprises
* To set up self-help entrepreneur-owned marts in clusters
* Will ensure dignified livelihood opportunity to specially abled
* Self-help entrepreneur-owned marts to get help via enhanced fin pdts
* To scale up production of artificial limbs
* To set up NIMHANS 2, mental health institutes in Ranchi, Tejpur
* To set up emergency, trauma care wings in district hospitals
* To develop industrial corridor in east with connection in Durgapur
* To enhance emergency, trauma care wings in district hospitals
* Propose scheme to develop Buddhist circuits in north-east states
 

REFORMS 

* Have cut critical import dependency

* Ensured reforms to up purchasing power, household econ, agri sector

* New tech production systems raising critical mineral demand

* Our aim is to transform potential into performance

* Third responsibility of Budget aligned with inclusive development

* Threefold approach needs supportive ecosystem

* Need to sustain structural reform momentum

* To have robust fincl sector to mobilise savings

* Cutting-edge technology, AI can serve as force multipliers

* Over 350 reforms rolled out since Aug 15

* Reform express ongoing to boost growth, employment, production

* Formed panels, working with state govts on deregulation

* The reform express is well on its way, will maintain momentum

* Propose interventions in six areas

* Propose creating champion MSMEs

* To rejuvenate legacy industrial sectors

* To stregthen central drug standard organisation

 

End

 

Compiled by Vinod Bhovad

Filed by Vandana Hingorani and Akul Nishant Akhoury

 

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