More Stories

Informist, Sunday, Feb. 1, 2026

MUMBAI – Following is a compilation of stories on the Union Budget for 2026-27 (Apr-Mar), tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman on Sunday:

SPECIAL STORIES

===============

WRAP: BUDGET MOVES TO MEDIUM-TERM GROWTH FROM FISCAL PRUDENCE, DISAPPOINTS

==========================================================================

Finance Minister Nirmala Sitharaman's ninth Union Budget doubled down on what she had hinted last year--post-pandemic government policies are nearing their end and the focus is shifting towards cyclical and structural steps to support and accelerate broad-based growth.

Since the COVID-19 pandemic, Prime Minister Narendra Modi's government has focussed on fiscal consolidation and increasing capital expenditure--steps appreciated by global credit rating agencies and economists. The Budget for 2025-26 (Apr-Mar) started the shift away from these policies, providing income tax breaks to boost consumption and announcing a change in the fiscal goal post to debt-to-GDP from fiscal deficit. This was followed by a cut and rejig in the goods and services tax later in the year to support an economy facing high penal tariffs from the US.

On Sunday, Sitharaman presented a Budget that effectively marked the end of the fiscal consolidation era with the fiscal deficit for FY27 seen at 4.3% of GDP, only 10 basis points lower than that projected for FY26. While fiscal consolidation has continued, the pace of reduction in the fiscal deficit for FY27 is the slowest since before the pandemic. The target for FY27 is also higher than the 4.2% of GDP expected by economists and market participants for FY27, albeit by just 10 bps.

The government's debt-to-GDP target for FY27 also disappointed with the government starting slowly on its target to lower its debt to 50% of GDP by March 2031, with a band of 100 bps on either side to provide some flexibility. At 55.6%, the targeted debt-to-GDP ratio for FY27 is only 50 bps lower than the target of 56.1% of GDP for FY26 but also 50 bps higher than economists' expectation of 55.1%.

"We had expected a bigger push on fiscal consolidation, given next year will have other pressures like the new pay commission," HSBC said in a report. "The fiscal consolidation for FY27 is the slowest in six years. And the budgeted disinvestment, which is a below-the-line funding item, is likely to see the highest rise in six years. The combination of the two means after several years, the fiscal impulse will go from negative to neutral, and this should be good news for GDP growth."

But a slower pace of debt consolidation next year, even if positive for growth, makes the FY31 target that much more difficult to achieve. The government will have to maintain high GDP growth if the debt-to-GDP target is to be met by FY31. For FY27, the government has assumed a nominal GDP growth of 10%, higher than the 8% it had estimated for FY26.

The debt-to-GDP ratio will now have to be reduced by 140 bps every year, on an average, if the mid-point of the 49-51% range is to be met by FY31. This will be a rather challenging task with the fiscal space likely to be limited over the next few years, more so with the continuing geopolitical uncertainties.

Moody's Ratings, one of the top two global credit rating agencies, said the government's proposed Budget leaves India's sovereign credit profile largely unchanged. Moody's has a long-term credit rating of 'Baa3', the lowest investment grade, with a stable outlook. Any rating upgrade the government may be hoping for will have to wait that much more.

"Support for the economy, which includes measures announced in recent months such as GST rationalisation, will lead to an ongoing erosion of tax revenue as a share of GDP that will worsen debt affordability as measured by interest payments relative to revenue," Christian de Guzman, senior vice-president at Moody's Ratings, said in a note Sunday. "Moreover, we do not expect significant progress on debt reduction, which supplants deficit consolidation as the anchor for fiscal policy, leaving our broader assessment of India's fiscal strength intact."

Instead of deeper fiscal consolidation, the Budget focused on providing "tactical support" to the economy which faces heightened external headwinds, best exemplified by the 50% tariff on Indian exports to the US. This support comes even as India's GDP growth is projected to grow at 7.4% in FY26, higher than in FY25. The Economic Survey for FY26, released Thursday, projected FY27 real GDP growth at 6.8-7.2%.

"Heading into the Budget, Finance Minister Nirmala Sitharaman's task was to balance political pressure to spend with the need to show continued fiscal restraint," Capital Economics said in a report. "On the first point, the government has announced an overarching programme to support the textiles sector which has been badly hit by punitive US tariffs. This includes bundling capital support, worker skilling and working-capital liquidity under a single framework."

The Budget focused on scaling up manufacturing in several strategic and frontier sectors--textiles, healthcare, semiconductors, electronics components, rare earth permanent magnets, and containers as also setting up of passenger and freight corridors. A key announcement was of the tax holiday till 2047 to foreign companies setting up global data centre services in India. Sitharaman also announced steps to create "champion" micro, small, and medium enterprises, including a INR-100-billion SME growth fund. These areas are either the ones most affected by the US tariffs or of key global importance, where India has been lagging behind. 

"The Budget's push for MSME development, through expanded equity support, liquidity infusions, and credit guarantees, will improve financing access for small businesses and fuel nationwide entrepreneurship," said Vinod Francis, chief financial officer, South Indian Bank. "Structural initiatives like India Semiconductor Mission 2.0, high-speed rail expansions, and targeted aid for manufacturing and emerging sectors promise greater competitiveness, job creation and economic resilience."

To ensure the economy fires on all cylinders, the government renewed its focus on the services sector, having focused largely on the manufacturing sector since the pandemic, a strategy that drew criticism from experts. Sitharaman announced setting up of a committee to recommend measures that focus on the services sector as a core driver of Viksit Bharat. "This will make us a global leader in services, with a 10% global share by 2047. The Committee will prioritise areas to optimise the potential for growth, employment and exports," Sitharaman said.

Sitharaman also proposed setting up a committee to comprehensively review the banking sector and align it with India's next phase of growth. The government also proposed restructuring of Power Finance Corp. and Rural Electrification Corp. to increase scale and improve efficiency in the public sector non-banking financial companies. 

These measures, for both the manufacturing and services sectors, are welcome but fall well short of being called reforms. "The Budget did not sufficiently address concerns around the cost of doing business and investment, particularly measures to attract foreign institutional and direct investment," Saurabh Sanyal, secretary general, Associated Chambers of Commerce and Industry of India, told Informist. Sanyal added while the Budget pegged capital expenditure at INR 12.2 trillion for FY27 and announced new projects such as education hubs, it did not highlight the upgradation of existing infrastructure.

For the equity market, the proposal to increase the securities transaction tax on futures and options transactions came as a shock. The Nifty 50 saw its biggest single-day fall in nine months Sunday. The Budget proposes raising the STT on futures contract transactions to 0.05% from 0.02% and on options premium and exercise of options to 0.15% each from 0.1% and 0.125%, respectively. Sitharaman said the tax was raised to discourage speculative trading.

Perhaps the biggest disappointment from the Budget was for the agriculture sector. While Sitharaman announced support to high value crops such as coconut, sandalwood, cocoa, and cashew, the lack of changes to customs duties left the market disappointed. Market participants had widely expected an increase in customs duty on edible oil to deter imports and sops to boost exports of some commodities. Neither materialised.

Ombeer Singh Tyagi, vice president, UPL Ltd., said the Budget did not address key concern of the agrochemical industry as it lacked rationalisation in customs duties to support domestic manufacturing. 

"The agricultural sector has been more or less ignored and there have been no changes to the customs duty or to the Budget allocation for agricultural commodities." Biren Vakil, founder and chief executive officer, Paradigm Commodity Advisors Pvt. Ltd., told Informist. "The government has not changed the duty structures on agricultural commodities as it is cautious ahead of elections in several states. They did not want to take the risk of rising inflation. In general, the market is not happy with the Budget."  End

Reported by Shubham Rana

Edited by Akul Nishant Akhoury

FOCUS: GILT MKT TO GROAN UNDER RECORD FY27 SUPPLY, NEEDS BUYER OF LAST RESORT

=============================================================================

The government's record gross borrowing target of INR 17.20 trillion for 2026-27 (Apr-Mar) is sure to roil the bond market when it opens to trade Monday. While the supply is higher than expected, bond traders said they may find enough demand to fund the government over the course of the year – given enough time and support from the Reserve Bank of India.

Economic Affairs Secretary Anuradha Thakur said the market borrowing is not on the higher side, with the net market borrowing of INR 11.73 trillion pushing the gross supply to a record because of higher redemptions. To be sure, an Informist poll had put the net market borrowing at INR 11.6 trillion and the revised estimate for FY26 is INR 11.33 trillion. But all respondents to that poll had pegged the net Treasury bill issuance at INR 1 trillion or lower. The government blew past those expectations, telling investors to expect a net issuance of INR 1.30 trillion through net short-term borrowing.

There was also no indication from the government that it was in a position to bring down its FY27 redemptions from INR 5.47 trillion any further, either through switches with the RBI or through buy backs. The gross market borrowing is INR 900 billion higher than the median of the Informist poll of 30 analysts and sharply up from INR 14.61 trillion in FY26. The Centre also did not have the accounting benefit of repaying bonds through the collections of the compensation cess on the Goods and Services Tax, as it had done in the last three financial years.

"In my experience, the gross supply matters more than the net supply for the market...over time, yields (on the 10-year benchmark) should go higher and rise past 7% in FY27 as supply keeps coming," Ritesh Bhusari, deputy treasury head at South Indian Bank said. The yield on the 10-year benchmark Friday ended at 6.70%, and is seen at 6.65-7.00% until the financial year ends in March. For context, the yield was 6.66% before the current rate-cut cycle started in February 2025. In FY27, the trading range may rise to 6.80-7.25%.

KNIGHT IN RBI ARMOUR?

The first line of defence to cap bond yields will likely be the RBI, dealers said. Even without the central bank showing its hand, traders widely expect the RBI to express its displeasure with high yields through its actions. The RBI has conducted or announced gilt purchases worth around INR 7 trillion in FY26 so far. Among its latest actions, it bought bonds worth INR 126.55 billion in the secondary market in the week to Jan. 23, while picking up gilts worth INR 500 billion at an auction under its open market operations that week.

As the 10-year yield rose to near 6.70% in December, a psychologically crucial level for bond traders, the central bank has both bought gilts in the secondary market, announced fresh open market operation auctions, and advanced its bond purchases. Though all these measures are "primarily" used to infuse liquidity as RBI officials have said, market watchers cannot help but sense the government's debt manager is trying its best to keep borrowing costs in check. Traders have pencilled in net RBI gilt purchases of INR 4 trillion to INR 5 trillion in FY27 to help the borrowing programme sail through.

"The central bank has been amongst the bigger buyers of GSecs (government securities) in the past year and this is likely to continue until the domestic players, led by banks make a comeback to better balance the supply-demand mix," Radhika Rao, senior economist at DBS Bank, said in a report.

Immediate demand for bonds isn't seen coming from any other route. Foreign portfolio investors are not expected to pick up the slack in demand, as they are unlikely to be enthused with Indian bonds as the country's fiscal consolidation peters out. The Centre has targetted a debt-to-GDP ratio of 55.6% by the end of FY27, 50 bps higher than the consensus expectation of 55.1%. The domestic currency also hit a record closing low of 91.98 against the dollar Friday and is expected to weaken further. Moreover, India's fully accessible route bonds are still on review for being added to Bloomberg's flagship Global Aggregate Index till at least June, disappointing investors who had bet on their inclusion in January.

After the Budget, Moody's Ratings said the Indian government's steps to bolster economic growth over the past year will worsen its ability to afford debt. The government cut income taxes in the FY26 Budget before overhauling its indirect tax regime in September to spur domestic demand amid global uncertainty. Budget documents showed the government expects to spend 20 paise of every rupee it earns on interest payments for the fifth straight year in FY27. Or to use another metric, the government's interest payments will be 39.8% of its revenue receipts in FY27, up from 38.1% for FY26 as per the revised estimates and up from 37.3% over the budget estimate for FY26.

"...the gross market borrowing at Rs 17.2 lakh crores (INR 17.2 trillion) will continue to push bond yields under pressure," said Mridul Saggar, former executive director at the central bank. "RBI has its task cut out in managing such large borrowing. This might not be easy as market response to the switch auctions could be poor and fall short of budgeted Rs 2.5 lakh crore (INR 2.5 trillion). Such a large amount may only go through with higher market-distorting yields."

PUTTING UP MONEY

In a pre-Budget report, Goldman Sachs had charted out sources of demand for the government bond market in FY27 that most traders have largely mirrored after the Budget's presentation. Banks are expected to pick up INR 5.5 trillion of central and state government bonds on a net basis in FY27, around INR 1.3 trillion more than the current financial year, the report said. Bolstering their appetite would be double-digit deposit growth, the need to replace bonds sold to the RBI at OMOs, and attractive "carry" – the interest income earned over the funding cost by holding gilts to maturity.

"I think the gap that was there this year would be lower next year in terms of demand and supply because of the net issuance of g-sec has hardly gone up," a senior treasury official at a large state-owned bank said. "Sure, there will be a knee-jerk reaction but I don't think yields will be able to sustain above 6.80% in an environment where the RBI is still buying and banks have replacement demand." Banks' excess holdings of government bonds over the requirement under the statutory liquidity ratio have fallen in FY26 and the large gilt redemptions in FY27 will further lead to a churn in portfolios, the official said.

Already, the five-year benchmark gilt yields 110 basis points more than the policy repo rate of 5.25%. The seven- and 10-year benchmarks offered around 145 bps of carry Friday and all these yields are expected to shoot up Monday. Bets on further rate cuts in February and beyond are marginal, though analysts and some market participants still hope for further monetary policy easing through liquidity injections. The RBI's best efforts in bolstering durable liquidity have been stymied by slow government spending in recent months, though that is expected to pick up and add to banking system liquidity towards the end of the financial year.

Some banks have also indicated their preference for gilts over state bonds going ahead, despite the lower yields on offer. Banks' bond portfolios have tilted towards state government securities in recent months, having sold gilts to the RBI while absorbing the heavy supply of state bonds. The projected supply of state bonds in FY26 is 16% higher at a record INR 12.5 trillion, a key factor for the recent rise in yields on all government securities. Traders said the spread of state bonds over gilts may remain wide with a gross borrowing of INR 12 trillion to INR 13 trillion expected from states as well. This spread is now over 100 bps for some tenures, sharply up from around 40 bps a year ago.

"A big spike in liquidity from the RBI, or a softer stance (by the Monetary Policy Committee) could drive demand for short-term bonds but demand for belly and long-term securities will be limited. This should keep the curve on the steeper side (before the Apr-Sept borrowing calendar is announced in March)," South Indian Bank's Bhusari said.

That's not a consensus view, considering the sharp swing in net short-term borrowing in the last three fiscal years. The government's estimate for its net short term borrowing in FY25 is (-) INR 1.60 trillion, nil in FY26, and INR 1.3 trillion in FY27. Interestingly, the Budget has estimated a net issuance of INR 276.02 billion of 14-day T-bills in FY27. The 14-day intermediate T-bills are non-marketable and typically issued against state governments parking their excess cash with the Centre. Even discounting these, T-bill auction cut-off yields are expected to continue charting multi-month highs owing to the larger expected supply. This will in turn push up yields on bonds of up to three years' maturity.

To keep long-term bond yields in check, the government is expected to bring down its weighted average maturity of dated securities in the coming fiscal. The Centre's Oct-Mar borrowing calendar cut the issuance of bonds maturing in 30 years or more to 35% of the supply from over 39% in the first half.

Long-term investors are making a comeback to buying bonds after a partial hiatus caused by regulatory changes. Both pension funds and provident funds were allowed to increase their investments in equity and were investing heavily in shares since mid-2025, a trend that seems to have ended in January. Life insurers spent a chunk of 2025 reworking their product mix after the insurance regulator changed norms for accounting premium income from long-term policies but have stepped up bond purchases since December, dealers said. The return of these investors may lead the market back to a "normal" state, but optimism is limited after the Budget did not roll out tax sops for fixed income investment as some traders had anticipated.

"The borrowing number is a negative for the market but I don't think it's going to blow yields up," said Deepak Agrawal, chief investment officer - debt at Kotak Mahindra Asset Management Co. "We should certainly see some buying come in as the market reprices, and so the 10-year (gilt) yield should be between 6.65-6.85% in the next two months."

GLIMMERS ON THE EDGE

Some dealers also held on to the hope that FY27 may end up being better than budgeted for the government. Gross tax buoyancy is projected at a meagre 0.8 times the projected nominal GDP growth of 10% in FY27, lower than the buoyancy of 0.9-1.8 times seen since FY22. Borrowings from the National Small Savings Fund are also seen only marginally higher at INR 3.86 trillion in FY27 from INR 3.72 trillion in the revised estimate for FY26. As a share of funding the fiscal deficit, the share of small savings is expected to fall to 22.8% in FY27 from 23.9% in the current fiscal.

Traders were also confused with other receipts, from internal debt and the public account, showing an expected outflow of INR 458.01 billion in the next financial year, leading to a wider fiscal deficit. This was the first negative reading on that head since FY16. An expected repayment of public account liabilities other than state provident funds was responsible for most of the drain, according to the Budget documents. Some dealers said a reduction in this to the normal run-rate may help the government budget for bond buybacks in the next financial year, bringing down hefty redemptions in FY28 and beyond. 

"It is possible that the RBI does a switch later in the year to lower gross market borrowing, though no announcement has been made so far," HSBC economists led by Pranjul Bhandari said in a report after the Budget. "Also worth noting that the government has assumed small savings funding to grow by a small 4% y-o-y. This could come in higher, lowering the pressure from market borrowing."  End

Reported by Aaryan Khanna

With inputs from Pratiksha

Edited by Ashish Shirke

FOCUS: BUDGET RETAINS LEGROOM, OPTS FOR MILD FISCAL CONSOLIDATION IN FY27

=========================================================================

The Union government "surprisingly" opted for a slower pace of fiscal consolidation in 2026-27 (Apr-Mar) despite having the elbow room to move faster, according to economists. Higher expenditure on account of pay increases for government employees and electoral considerations near the target year of FY31 is likely to put pressure on its finances. While this does mean the government will have to consolidate more aggressively in comparatively difficult years, it is too early to assume that the government will miss its debt-to-GDP target for FY31, economists said. 

The Budget, presented on Sunday, estimated the debt-to-GDP ratio for FY27 at 55.6% of GDP, 50 basis points lower than the estimate of 56.1% of GDP for FY26. The target for FY27 was, however, at least 50 basis points higher than what was expected. FY27 will be the first year of the government's move to target debt as a percentage of GDP as the main parameter to track fiscal consolidation, instead of the fiscal deficit target that has been used in the past. The government is looking to cut its debt-to-GDP ratio to 50% by March 2031, with a band of 100 bps on either side. This means, it will have to cut its debt-to-GDP ratio by at least 140 bps each year, which is a tall task; more so, given the global geopolitical situation and the challenges of boosting domestic growth. 

Consequent to the move to debt-to-GDP ratio, the Budget projected the fiscal deficit in FY27 at 4.3% of GDP, 10 bps lower than the estimate for FY26 and higher than the 4.2% expected by economists. This means the fiscal consolidation targeted in FY27 is the slowest in six years.

"We hoped for a bigger fiscal consolidation in FY27. We estimated fiscal deficit to be cut to 4.2% and not 4.3%. The Budget also did just 0.5% debt consolidation. They should be doing at least 1% each year to meaningfully reach the target," said Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership. "It may be difficult for the government to consolidate steeply in FY28 – when pay commission payout takes effect, or in FY30, when general elections are around the corner," Upadhyay told Informist. 

The government has formed the eighth Central Pay Commission which will make recommendations about salary and compensation increases for central government employees. Pay commissions are typically set up every 10 years and their recommendations, when implemented, create pressure on government finances. The next general elections are likely to be held in 2029, which means the government will be tempted to announce populist measures around then – which will dilute or delay fiscal consolidation.

Defending the pace of gradual fiscal consolidation, Finance Minister Nirmala Sitharaman Sunday said such a path ensures the economy is not hurt. A contractionary fiscal policy tends to drag growth down. As such, India's GDP growth – in real terms – is projected at 6.8-7.2% in FY27, lower than the 7.4% estimated for FY26. The nominal GDP growth in FY27 is projected at 10%, higher than 8% for FY26. 

"Our reading is that the pace of reduction is not aggressive, keeping in mind the need to spur growth," Radhika Rao, executive director and senior economist at DBS Bank, said in a note.

The government's debt-to-GDP ratio could fall if GDP grows at a faster clip than debt. At 56.1%, the government's outstanding debt at the end of FY26 will be around INR 200 trillion. An average 10% nominal GDP growth over the next five years will mean the debt stock could expand by around INR 88 trillion even as the debt-to-GDP ratio falls to 50% by March 2031, meeting the target laid down in the last Budget. The glide path, therefore, allows the government to choose an expansionary Budget if the need arises and assume more aggressive consolidation in high-growth years.

According to Upadhyay, it will become important for the government to ensure nominal GDP continues to grow at a steady pace for debt to fall meaningfully. "If 10% nominal GDP is maintained, we can get to about 4% fiscal deficit by FY31. But if nominal GDP grows 10.5-11%, fiscal deficit can be 3.5%, so the growth pace is important," he said. 

Economists unanimously agree that the government may have kept its fiscal consolidation plan for FY27 on the "conservative" side owing to the tepid revenue growth in the current fiscal year. Tax collections are likely to pick up and that will make room for more aggressive consolidation in later years. 

Madan Sabnavis, chief economist, Bank of Baroda, said that the government's weaker revenues in FY26 have perhaps pushed it to adopt a gradual stance in FY27, which may improve in subsequent years when revenues are better. "This year, taxes are slow due to the incentives announced earlier, which is also dragging collections in FY27. Going forward, collections will stabilise and allow the government to adopt a steeper stance," he told Informist. 

The FY27 Budget projects total tax collections at INR 44.04 trillion, up 8.0% on year. Since nominal GDP growth is assumed at 10%, 8% growth in tax collections points to a tax buoyancy of only 0.8, the lowest in recent years. Tax buoyancy measures how well tax revenue is growing compared to economic growth. A buoyancy of over one means tax revenue is rising faster than GDP growth.

According to economists at BoFA Securities India, the government was "conservative" in its projections on the debt front, and may end up overshooting the debt target, especially with a new GDP series expected by the end of February. 

The Ministry of Statistics and Programme Implementation is in the process of revising the GDP base year to FY23 from FY12. The ministry will release its GDP growth estimate for FY26 based on the new series on Feb. 27 and all subsequent GDP data releases will be based on FY23 prices. This revision is broadly expected to push up the GDP reading a bit.

India last revised the GDP base year over a decade ago, shifting it to FY12 from FY05. That revision had resulted in a sharp upward adjustment to growth estimates and FY14 GDP growth was revised to 6.9% from 4.7%. However, that revision had also entailed changes to the methodology used to calculate GDP.

All said, Moody's Ratings, which has been critical of India's debt metric, remained unimpressed with the conservative fiscal glide path. Christian de Guzman, senior vice-president at Moody's, said the rating agency does not expect significant progress on debt reduction, leaving its broader assessment of India's fiscal strength intact. Moody's currently rates India at the lowest rung of investment grade at 'Baa3' with a 'Stable' outlook.  End

Reported by Priyasmita Dutta

Edited by Avishek Dutta

FOCUS: EQUITY 2026 GAINS SEEN SMALL AS BUDGET LACKS BIG BANG, STT A DAMPENER

============================================================================

The absence of any major boost to the economy in the Union Budget for the financial year 2026-27 (Apr-Mar) is expected to limit returns from the equity market this year. Some analysts expect only single-digit returns from the headline indices in 2026. In a more near-term concern, the sharp rise in securities transaction tax on futures and options trades has hit sentiment and may result in a further fall in equities when most foreign investors return for trading Monday.

Market participants sold equities in the special session organised Sunday because the Budget was to be presented. The benchmark indices slumped 2% each with the Nifty 50 ending below its key support level at 24825.45 points. The broader market fell more with the small-cap indices down nearly 3%.

Analysts said the Budget was largely in line with expectations, which were low to begin with. "Budget maintained status quo... taxation benefits were already announced last year, focus on sectors was similar to last year," Dharmesh Kant, head of research at Cholamandalam Securities, said.

Analysts were positive about the government's plan to keep lowering its fiscal deficit, the higher outlay for capital expenditure, and the announcements for the infrastructure sector. However, they advised investors to keep expectations of returns in check as the Budget announcements will only help the economy in the longer run and may not significantly change the course of earnings growth for Indian companies, which have been struggling with weak growth for almost two years.

"From a macro-perspective, everything was there (in the Budget)... But, your PE (price-to-earnings ratio of Nifty 50) is justified," Awanish Chandra, executive director of institutional equities at SMIFS Ltd., said. He expects the Nifty 50 to rise to 27500-28000 points this year, which would translate to a return of only 5-7% in 2026. Echoing this, Cholamandalam's Kant said the market is likely to move in a range for 3-4 months, until India and the US sign a trade deal.

"India remains a strong market to pick stocks, but things are changing on the global front, which is a bigger issue," Chandra of SMIFS said. Market participants are eagerly waiting for the trade deal, which is expected to result in the 50% tariff on Indian goods exports to the US being lowered. The trade deal, which was expected to be signed last year, has already been delayed and a further delay will put equities at a risk as investors may begin to lose patience, analysts said.

The government estimates India's nominal GDP will grow 10% in FY27. This suggests top companies may also not be able to grow their earnings significantly as these companies usually tend to post earnings growth that is a few percentage points better than the nominal GDP growth, analysts said. "Our estimates suggest a 12-13% rise in earnings for FY27, but earnings growth needs to be 15%-plus for stronger returns," Kant said of the companies in the Nifty 50 index.

Returns from the equity market have come down over two years as stock valuations remain high. The Nifty 50 was up over 10% in 2025 and 9% in 2024--half of the 20% rise seen in 2023.

Analysts lauded the government's plan to push its capital expenditure to a record high level, but they were concerned that it may miss the target. The government plans to incur capital expenditure of INR 12.2 trillion in FY27, an increase of 9% on year. Brokerages had expected the outlay to rise 4-13%. But even the 9% increase seems to have disappointed some as shares of companies dependent on government orders fell. The Nifty Infrastructure index and the BSE Capital Goods index closed 2.5-3% lower.

Analysts were worried about higher-than-expected gross borrowings, which are likely to drive up bond yields and hit profits of banks. The Budget pegs the government's FY27 gross market borrowing at INR 17.2 trillion--significantly higher than INR 16.30 trillion expected by economists and market participants in an Informist poll. The Nifty PSU Bank was down nearly 6% Sunday and the Nifty Bank closed 2% lower.

NEAR-TERM STT IMPACT

The sharp rise in securities transaction tax is likely to impact market sentiment for a while and hit volumes from algorithm and high-frequency traders, analysts said. These traders work on narrow margins and the increase in the tax is most likely to affect them significantly, they said. The Budget raised the securities transaction tax on futures transactions to 0.05% from 0.02% and on options premiums and exercise of options to 0.15% from, respectively, 0.1% and 0.125%.

"They (the tax increases) make many high-frequency and arbitrage trades unviable, which will squeeze market liquidity and leverage in the short term," Raamdeo Agrawal, chairman of Motilal Oswal Financial Services Ltd., said in a statement. However, most analysts do not expect the tax to hit volumes in the futures and options market beyond a few months. "Call it greed... but unless there is a bar on margin or one finds another asset that makes higher returns, people will come back," Chandra of SMIFS said.

Fow now, analysts expect the Nifty 50 to fall more in the coming weeks as disappointment around the Budget pulled the Nifty 50 below its key support level Sunday. Technical analysts expect the Nifty 50 to fall to 24500-24300 points Monday, indicating a fall of 2% more.

"We will be opting for sell on rise for the first 15 days," Brijesh Ail, assistant vice-president of research at Shriram Wealth, said. While the securities transaction tax is a negative for the markets, several analysts expect the indices to eventually recover from the lows they may touch over the next few days. The continuing domestic inflows into equities through mutual funds will help to limit any fall, analysts said.

Reported by Anshul Choudhary

Edited by Rajeev Pai

OTHER STORIES

=============

EXTENDS IMMUNITY FROM PROSECUTION UNDER THE BLACK MONEY ACT

===========================================================

The government has proposed to give immunity from prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, for non-disclosure of non-immovable assets with aggregate value less than INR 20 million. This will be effective retrospectively from October 1, 2024, Finance Minister Nirmala Sitharaman proposed in the Union Budget for 2026–27 (Apr–Mar) on Sunday. 

The Finance Bill 2026 proposes to amend sections 49 and 50 of the act to provide relief for cases involving non-disclosure of small foreign assets. 

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 makes provisions to deal with the problem of black money that is undisclosed foreign income and assets, procedure for dealing with such income and assets and to provide for imposition of tax on any undisclosed foreign income and asset held outside India and for matters connected therewith or incidental thereto.

Reported By Arya S. Biju

Edited by Deepshikha Bhardwaj

GOVT PROPOSES NO INTEREST DEDUCTIONS FOR DIVIDEND, MF INVEST LOANS

==================================================================

The government plans to disallow interest deductions on loans taken to invest in dividend-yielding stocks and mutual funds, effectively scrapping a tax benefit available to investors, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday. 

"It is proposed to provide that no deduction shall be allowed in respect of any interest expenditure incurred in relation to dividend income or income from units of mutual funds, and to omit the existing provision permitting such deduction subject to a specified ceiling," Sitharaman said. 

According to industry experts, investors borrowing to invest in dividend stocks or mutual funds will not be able to claim interest deductions, which makes income fully taxable.

Reported by Vaishali Tyagi

Edited by Vandana Hingorani

PROPOSES INR 100 BLN GROWTH FUND, LIQUIDITY SUPPORT FOR MSMES

=============================================================

The Budget has proposed a three-pronged approach to support micro, small and medium enterprises, providing equity, liquidity and professional support. Presenting the Budget for 2026-27 (Apr-Mar), Finance Minister Nirmala Sitharaman said a dedicated INR 100 billion SME Growth fund has been proposed to create future champions to incentivise enterprises based on select criteria.

The government also plans to boost the Self-Reliant India Fund established in 2021, topping it up with INR 20 billion. The additional fund will continue to support micro enterprises and maintain their access to risk capital, she said.

The 2021 self-reliant fund was set up to infuse INR 500 billion in equity funding into MSMEs with the potential and viability to become large units. Under this Fund, INR 100 billion was to be provided by the government, and INR 400 billion by private equity and venture capital funds.

The government has also announced measures to facilitate faster payment of dues to small enterprises to settle transactions through the Trade Receivables Discounting System (TReDS) platform, introducing a credit guarantee support mechanism through CGTMSE for invoice discounting, and introducing TReDS receivables as asset-backed securities, helping develop a secondary market, improving liquidity and settlement of transactions.

TReDS is a platform that allows smaller enterprises to discount invoices receivable through an auction mechanism, helping them receive the due amount quickly for goods and services supplied to corporates.

To help MSMEs better manage compliance, the government announced the development of a cadre of 'corporate mitra.' The aim is to ease the compliance burden for MSMEs through these professionals at an affordable cost, Sitharaman said.

The Budget has allocated INR 245.66 billion to the Ministry of Micro, Small and Medium Enterprises for 2026-27, more than double the revised estimates for 2025-26. However, more than 70% of this increase stems from an INR 90 billion allocation for the Guarantee Emergency Credit Line facility to eligible MSME borrowers, which was part of the budget estimates for FY26 but excluded from the revised FY26 estimates.

Reported by Suryash Kumar

Edited by Saji George Titus

PROPOSES OUTLAY OF INR 59.40 BLN FOR AUTO PLI SCHEME FOR FY27

=============================================================

The Union Budget for 2026-27 (Apr-Mar) has proposed an outlay of INR 59.40 billion for the production-linked incentive scheme for automobiles and auto components. The government had budgeted an outlay of INR 28.19 billion for the scheme for 2025-26 (Apr-Mar), which has been revised lower to INR 20.91 billion. In FY25, the government had spent INR 3.25 billion towards the scheme.

The scheme was launched in September 2021 with a budgetary outlay of INR 259.38 billion. It was designed to boost domestic manufacturing of advanced automotive technology products in India. FY24 was the first performance year under the scheme.

Eligible companies can avail of the benefits under this scheme until Mar. 31, 2028. The scheme proposes financial incentives for 19 categories of Advanced Automotive Technology (AAT) vehicles and 103 categories of AAT components to boost domestic manufacturing of Advanced Automotive Technology products and attract investments in the automotive manufacturing value chain, according to an official document. 

Under the scheme, the government had provided incentives for 1.36 million automobile units until Dec. 31 across electric two-wheelers, three-wheelers, four-wheelers, and buses. Applicants are eligible to avail of incentives under this scheme only if they achieve domestic value addition of at least 50%. As of Dec. 31, eight companies in the 'Champion OEM' (original equipment manufacturer) category received certification for 94 variants, while 10 applicants in the Component Champion category received certification for 37 variants.  

Reported by Anand JC

Edited by Saji George Titus 

ALLOCATES INR 20 BLN FOR CARBON CAPTURE TECHNOLOGIES OVER 5 YEARS

=================================================================

The government has announced an outlay of INR 200 billion over the next five years for Carbon Capture, Utilisation, and Storage technologies to achieve higher readiness levels in end-use applications across industrial sectors, including power, steel, cement, refineries, and chemicals. This comes in the backdrop of India launching an R&D roadmap to enable it to achieve its net-zero target through carbon capture.

Carbon Capture, Utilisation, and Storage involves capturing carbon dioxide from large industrial facilities, such as power generation plants that use fossil fuels or biomass and transporting it for use in a range of applications, or injecting it into deep geological formations, such as depleted oil and gas reservoirs or saline aquifers.

The R&D roadmap to enable India's net-zero targets through Carbon Capture, Utilisation, and Storage was prepared by the Department of Science and Technology. The government's greening push comes at a time when the EU's carbon border adjustment mechanism and other global regulations risk making Indian exports uncompetitive.

India has set an ambitious goal to achieve net-zero emissions by 2070, with Carbon Capture, Utilisation, and Storage likely to be one of the pillars of its greening strategy. 

Reported by Suryash Kumar

Edited by Saji George Titus

OPPOSITION SLAMS GOVT, SAYS SCHEMES REPACKAGED, DELIVERY MISSING

=================================================================

Indian National Congress President Mallikarjun Kharge Sunday said the Union Budget for the financial year 2026-27 (Apr-Mar) provides "not a single solution" to India's many economic, social, and political challenges.

He said that while farmers still await meaningful welfare support or an income security plan, the Budget offered no solutions to the slump in exports, heightened tariff risks, or the growing trade deficit. Neither did it touch upon the plunging rupee.

"Manufacturing: no revival strategy; stuck at 13%. Where is Make in India?  Jobs: no serious plan for employability for our youth or increasing participation of women in workforce. What is the outcome of earlier internship and skill development schemes?" Kharge asked.

On urban infrastructure, Kharge, who is also leader of the Opposition in the Rajya Sabha, said the government has only repeated earlier statements but the delivery is missing as cities remain unliveable. "When will we have 'smart cities' or even liveable cities?" he said. He also remarked that there was "not one word" in the Budget on the allocation for the new law that has replaced the Mahatma Gandhi National Rural Employment Guarantee Act.

Commenting on the Budget, former Union finance minister P. Chidambaram said the officially announced inflation numbers and the ground realities in terms of bills for household expenditure, education, health care, and transport do not match. "The Centre's capex (capital expenditure) has fallen from 3.2% of GDP in 2024-25 to 3.1% in 2025-26. The fiscal deficit for FY27 will reduce by a meagre 0.1%--to 4.3% from 4.4%," he said.

Chidambaram also wondered if Finance Minister Nirmala Sitharaman was "even aware" of the figures of rising household borrowings and declining household savings. "The last I checked, household borrowing had touched an all-time high of around 51.7%. But the finance minister didn't even mention these numbers," he said.

He also pointed out that the "uncertain outlook" for flow of foreign direct investment to India and the "persistent outflow" of foreign portfolio investor funds for the last several months did not merit a mention in Sitharaman's Budget speech.

Social activist and Swaraj India founder Yogendra Yadav said the Budget "gives a clear indication" that villages, farmers, and agriculture are now outside of the government's priorities.

"For the first time, no mention of farmers in the budget. Data shows slashed spending on farming, rural development, crop insurance, and fertiliser," Yadav wrote on social media platform X. "The government is saying, 'grow almond, walnut. If you can't, we don't need you'."

West Bengal Chief Minister Mamata Banerjee said her state had got nothing from the Budget. The All India Trinamool Congress president slammed the Narendra Modi government for allegedly renaming and repackaging schemes conceptualised and announced by previous governments.

"The much-hyped freight corridor announcement... the Durgapur–Dankuni–Amritsar freight corridor was announced in 2009 when I was the railway minister. What they (the Centre) said... are blatant lies," she said.

Samajwadi Party President Akhilesh Yadav took a jibe at the Bharatiya Janata Party-led government at the Centre as the stock market slid after the Budget was presented. "The result of BJP budget is out: markets have tumbled," Akhilesh posted on X. He said the Budget is meant only for the top 5% of the country's population. 

Reported by Asim Khan

Edited by Rajeev Pai

GRANTS CUSTOMS DUTY RELIEF FOR AVIATION COMPONENTS, RAW MATERIALS

=================================================================

The Budget for 2026-27 (Apr-Mar) granted exemption from basic customs duty to civil and defence aviation parts required for the manufacture of civilian, training and other aircraft.

"It is proposed to exempt basic customs duty on raw materials imported for manufacture of parts of aircraft to be used in maintenance, repair, or overhaul requirements by Units in the Defence sector," Finance Minister Nirmala Sitharaman said in her Budget speech Sunday.

"BCD (Basic Customs Duty) is being exempted on raw materials for manufacture of parts of aircraft for maintenance, repair, or overhauling of aircraft or components or parts of aircraft, including engines (provided that the goods are imported by public sector units under the Ministry of Defence)," the Ministry of Finance said in a letter to top tax brass while summarising the key highlights of the budgetary changes.

"BCD is being exempted on components or parts, including engines, of aircraft, for the manufacture of aircraft and parts of such aircraft," the ministry said.

These changes, subject to other conditions under notification no. 02/2026-Customs, dated Feb. 1, are effective from Monday.

Aircraft tyres, however, will continue to attract 2.5% basic customs duty and 0.5% agriculture infrastructure and development cess, the ministry said. 

Reported by Prateem Rohanekar

Edited by Tanima Banerjee

PFC, REC RESTRUCTURING TO STREAMLINE NBFCS, SAYS SITHARAMAN

===========================================================

The Budget for 2026-27 (Apr-Mar) granted exemption from basic customs duty to civil and defence aviation parts required for the manufacture of civilian, training and other aircraft.

"It is proposed to exempt basic customs duty on raw materials imported for manufacture of parts of aircraft to be used in maintenance, repair, or overhaul requirements by Units in the Defence sector," Finance Minister Nirmala Sitharaman said in her Budget speech Sunday.

"BCD (Basic Customs Duty) is being exempted on raw materials for manufacture of parts of aircraft for maintenance, repair, or overhauling of aircraft or components or parts of aircraft, including engines (provided that the goods are imported by public sector units under the Ministry of Defence)," the Ministry of Finance said in a letter to top tax brass while summarising the key highlights of the budgetary changes.

"BCD is being exempted on components or parts, including engines, of aircraft, for the manufacture of aircraft and parts of such aircraft," the ministry said.

These changes, subject to other conditions under notification no. 02/2026-Customs, dated Feb. 1, are effective from Monday.

Aircraft tyres, however, will continue to attract 2.5% basic customs duty and 0.5% agriculture infrastructure and development cess, the ministry said. 

Reported by Prateem Rohanekar

Edited by Tanima Banerjee 

TO EXEMPT TAX ON GLOBAL INCOME OF FOREIGN EXPERTS WORKING IN INDIA

===================================================================

The government has proposed to exempt global income, excluding Indian-sourced income, of foreign experts who visit India and stay for a period of five years, according to the Budget for 2026–27 (Apr–Mar), presented by Finance Minister Nirmala Sitharaman in Parliament.

The move is aimed at attracting global talent by providing tax certainty, ensuring that only income sourced in India is taxable, even if the expert remains in the country for a longer period. The expert visiting India should have been a non-resident for the previous five years and should be providing services under a notified government scheme, according to the Budget document.

Reported by Gunjan Rajput

Edited by Saji George Titus 

TO ALLOW SALES FROM SEZ UNITS INTO DOMESTIC MKT AT CONCESSIONAL DUTY

====================================================================

The government has proposed a special one-time measure allowing eligible manufacturing units in special economic zones to sell goods in the domestic tariff area, or the domestic market, at concessional rates of duty. This would help address concerns about utilisation of capacities by manufacturing units in these areas due to global trade disruptions, Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2026-27 (Apr-Mar), in the Lok Sabha Sunday.

"I propose, as a special one-time measure, to facilitate sales by eligible manufacturing units in SEZs to the Domestic Tariff Area (DTA) at concessional rates of duty," Sitharaman said.

At present, manufacturing units in these special economic zones are allowed to sell their products in the domestic market on payment of duties on an output basis.

The quantity of such sales will be limited to a prescribed proportion of their exports. Sitharaman said that necessary regulatory changes will be undertaken to operationalise these measures while ensuring level-playing field for the units working in the domestic tariff area. 

Reported by Taniva Singha Roy

Edited by Deepshikha Bhardwaj

GOVT TO SUPPORT FARMER HIGH-VALUE CROPS TO DIVERSIFY FARM OUTPUT

=================================================================

The government will support high-value crops like coconut, sandalwood, cocoa, and cashew in coastal areas agar trees in northeast and almonds, walnuts, and pine nuts in our hilly regions to diversify farm output, increase productivity, enhance farmers' incomes, and create new employment opportunities, Finance Minister Nirmala Sitharaman said, presenting the Budget 2026-27 (Apr-Mar) in the Lok Sabha.

The minister said the government has proposed a Coconut Promotion Scheme to increase production and enhance productivity through various interventions, including replacing old, unproductive trees with new plants and varieties in major coconut-growing states. 

The government has also proposed a dedicated programme to make India self-reliant in raw cashew and cocoa production and processing and transform Indian Cashew and Indian Cocoa into premium global brands by 2030, she said.

On sandalwood, the Centre will partner with state governments to promote focused cultivation and post-harvest processing to restore the glory of the Indian Sandalwood ecosystem, she said. 

To rejuvenate old, low-yielding orchards and expand high-density cultivation of walnuts, almonds and pine nuts, the government will support a dedicated programme to enhance farmers' incomes and add value by engaging youth, she said. 

Reported by Prateem Rohanekar

Edited by Saji George Titus

SETS OUTLAY OF INR 200 BLN FOR CARBON CAPTURE, STORAGE OVER 5 YEARS

===================================================================

The Union Budget for 2026-27 (Apr-Mar) has proposed an allotment of INR 200 billion for carbon capture utilisation and storage over the next five years, Finance Minister Nirmala Sitharaman said Sunday in her Budget speech. 

"Aligning with the roadmap launched in December 2025, CCUS (carbon capture utilisation and storage) technologies at scale will achieve higher readiness levels in end-use applications across five industrial sectors, including power, steel, cement, refineries, and chemicals," she said.

The research and development roadmap to enable India's net zero targets through carbon capture utilisation and storage was prepared by the Department of Science and Technology. The greening push from the government comes at a time when the European Union's Carbon Border Adjustment Mechanism and other global regulation risk making Indian exports uncompetitive.

India has set the ambitious goal of achieving net zero emissions by 2070, with carbon capture utilisation and storage likely to be one of the pillars of the strategy. 

Reported by Suryash Kumar

Edited by Rajeev Pai

IN INFRA PUSH, GOVT PROPOSES 7 HIGH-SPEED RAIL CORRIDORS, WATERWAYS

===================================================================

In a bid to push development of infrastructure, the Centre aims to set up environmentally-sustainable seven high-speed rail passenger corridors and a freight corridor, Finance Minister Nirmala Sitharaman said in Parliament Sunday while presenting the Budget for 2026-27 (Apr-Mar). The finance minister also announced schemes to boost transport through waterways and seaplanes. The government will continue to focus on developing infrastructure in Tier-II and Tier-III cities--which have a population of over 500,000, the finance minister said. 

The seven high-speed rail routes or ‘growth connectors' will be between Mumbai and Pune, Pune and Hyderabad, Hyderabad and Bengaluru, Hyderabad and Chennai, Chennai and Bengaluru, Delhi and Varanasi, and between Varanasi and Siliguri. Sitharaman proposed central government support in six areas, of which one is "delivering a powerful push to infrastructure." The Budget also proposed a freight corridor connecting Dankuni in West Bengal to Surat in Gujarat. 

The Centre also aims to start 20 new national waterways over the next five years, Sitharaman said. The first waterway under this plan is National Waterway-5 in Odisha to connect mineral rich areas of Talcher and Angul and the industrial centre of Kalinga Nagar to the port towns of Paradeep and Dhamra, Sitharaman said. The Centre has proposed to set up training institutions to skill and train youth for manpower required to operate these waterways. These institutes will be set up as Regional Centres of Excellence, Sitharaman said. 

The government will establish a ship repair facility in Varanasi and Patna for inland waterways. The Centre aims to diversify reliance on rail and road, and increase transport through inland waterways and coastal shipping to 12% in 2047 from 6% now, Sitharaman said. The government proposes to do this through the Coastal Cargo Promotion Scheme.

The government will create city economic regions around tier II and tier III cities and temple towns to develop the infrastructure in these cities. Sitharaman announced an allocation of INR 5 billion for each city economic region for each such city across five years. These city economic regions will be based on the growth drivers of each city.

To promote tourism and improve connectivity in remote area, the government has proposed incentives to indigenously manufacture seaplanes. The government will support operations through the Seaplane viability gap funding scheme, the finance minister said.  

Reported by Cassandra Carvalho

Edited by Pankaj Aher

ECON SECY SAYS FISC GAP CONSOLIDATION MAIN AIM UNDER DEBT GLIDE PATH

====================================================================

The government's main target remains reducing the country's fiscal deficit under the debt glide path, Economic Affairs Secretary Anuradha Thakur said Sunday. "...glide path will be continued and fiscal deficit in other words shall be the operational target to attain the debt-to-GDP. So it's not that we are going away from fiscal deficit, it's not going to be monitorable target," Thakur said in a press conference after the Budget announcement.

The fiscal policy strategy for 2026-27 (Apr-Mar) will continue to be guided by the debt glide path indicated in the Union Budget for FY26. The medium-term target is to lower its debt to 50% of GDP, plus or minus 1%, by FY31 with the fiscal deficit acting as the operational target.

The Budget has pegged the fiscal deficit target for FY27 at 4.3% of GDP, while the deficit for FY26 was retained at 4.4% GDP in the revised estimates. The central government's debt is seen at 55.6% of GDP in FY27, down from 56.1% in FY26.

In absolute terms, the fiscal deficit for FY27 is estimated at INR 16.958 trillion, up from the revised estimate of INR 15.585 trillion for the current financial year. The Budget for FY26 had projected the fiscal deficit at INR 15.689 trillion. Data released Friday showed the fiscal deficit in the first nine months of FY26 was INR 8.558 trillion, accounting for 54.9% of the revised estimate.  

Reported by J. Navya Sruthi

Edited by Ashish Shirke

GOVT VIEWS AI AS FORCE MULTIPLIER; FOCUS ON SERVICES SECTOR

===========================================================

Cutting-edge technologies, including applications related to artificial intelligence, can serve as force multipliers for the government's three-fold approach of economic growth, building capacities of individuals, and access to resources and opportunities, Union Finance Minister Nirmala Sitharaman said, while presenting the budget 2026-27 (Apr-Mar). 

"Adoption of technology is for the benefit of all people - farmers in the field, women in STEM (Science, technology, engineering, and mathematics), youth keen to upskill and Divyangjan to access newer opportunities," Sitharaman said. 

For education, the government has proposed embedding artificial intelligence in the school curriculum, Sitharaman said. The proposal also includes the upgradation of state councils of educational research and training institutes for teacher training. The government also plans to upskill and reskill technology professionals in AI and emerging technologies, as well as to implement measures for AI-enabled matching of workers, jobs and training opportunities, she said. 

For the services sector, the government has proposed setting up a high-powered committee to recommend measures that position the sector as a core driver of Viksit Bharat. "This will make us a global leader in services, with a 10% global share by 2047. The committee will prioritise areas to optimise the potential for growth, employment and exports," Sitharaman said. The committee will assess the impact of emerging technologies, including AI, on jobs and the skill requirements of proposed measures. 

Under the Divyang Sahara Yojana, the government plans to support the Artificial Limbs Manufacturing Corp. of India by scaling up production of assistive devices and investing in R&D and AI integration. 

For agriculture, the government has proposed launching Bharat-VISTAAR, a multilingual AI tool that will integrate the AgriStack portals and the ICAR package on agricultural practices with AI systems, Sitharaman said. "This will enhance farm productivity, enable better decisions for farmers and reduce risk by providing customised advisory support," she said. 

For ports, the government plans to expand the utilisation of non-intrusive scanning, using advanced imaging and AI technology, for risk assessment in a phased manner, with the objective of scanning every container across all major ports, Sitharaman said. 

Reported by Astha Oriel

Edited by Saji George Titus

FY27 NOMINAL GDP AS PER FY12 BASE YR "REALISTIC": FIN MIN TOP BRASS

===================================================================

The growth projection of 10% in nominal GDP in 2026-27 (Apr-Mar) is a "realistic" estimate and is based on the current GDP series with FY12 as the base year, according to the top brass of the finance ministry, including Finance Minister Nirmala Sitharaman. The statement comes ahead of the statistics ministry's upcoming release on GDP estimates with FY23 as the base year, expected Feb. 27.  

In 2015, when India had last revised the base year for GDP to FY12 from FY05, the size of nominal GDP for FY13 and FY14 underwent an upward revision by INR 6 trillion–INR 8 trillion. If history rhymes, the size of nominal GDP for FY26 may also rise from the current estimate of INR 357.14 trillion, which may further revise the estimates for fiscal deficit and debt-to-GDP ratio. 

The government aims to cut the fiscal deficit to 4.3% of GDP in FY27 from 4.4% in the revised estimate for the current fiscal year. This fiscal deficit target is "responsible" and "responsive," Sitharaman told the media at the post-Budget briefing. The government needs to ensure that the fiscal deficit comes down gradually without hurting the economy, Sitharaman said. 

The government would continue its endeavour for fiscal consolidation to lower its debt-to-GDP ratio, Economic Affairs Secretary said Anuradha Thakur, who was also present at the briefing. The fiscal deficit will be the operational target, against which the government will anchor its glide path to lower the debt to 49–51% of GDP by FY31. The government had announced its debt consolidation roadmap in FY26 and had mentioned that debt would become its prime focus.   

But the government will continue its capital expenditure push, while maintaining a downward trajectory for fiscal deficit and debt, Sitharaman said. The Centre's capital expenditure target for FY27 is INR 12.22 trillion, up 11.5% from the revised estimate of INR 10.96 trillion for the current year. The government has credibility in terms of managing the fiscal deficit, and it would also support capital expenditure while being prudent, Thakur said.   

While the Centre's roadmap to cut debt is clear, states are yet to come into action. Sitharaman said that the central government could only have a conversation and nudge states to lower their debt. Among other dialogue with state governments, the Centre has also asked them to become self-reliant in critical minerals. 

Questions on the possibility of fiscal slippage and the government sticking to the target gained steam after its revenue stream--particularly direct taxes--showed signs of drying up. For the year starting April, the government has projected gross tax collections to grow 8% on year to INR 44.04 trillion. This means the tax buoyancy for FY27 will be a tepid 0.8.

Revenue Secretary Arvind Srivastava, who was also present at the event, said tax revenue would be "sufficiently" buoyant in FY27. According to him, direct tax growth is the accurate metric of measuring tax buoyancy and that is estimated at 1.14, which is sufficient. 

Besides direct taxes, the secretary said that indirect taxes were also seen growing at a healthy pace with the tax base normalising. Excise collections, which are projected to be particularly robust in FY27, are seen higher owing to the excise duty hike on tobacco and related products, he explained. From Sunday, the government will impose higher excise on tobacco products to ensure tax incidence as the GST compensation cess is being discontinued.

Speaking about the change in taxation for buybacks, the secretary said that the change, if at all, was a "relief" for taxpayers and not a "burden." In the Budget, Sitharaman proposed taxing buybacks for all types of shareholders as capital gains, with the long-term capital gains attracting a 12.5% tax and short-term capital gains attracting 20%. 

Sitharaman also proposed an additional tax on buybacks for promotors to "disincentivise" misuse of tax arbitrage. "This would make effective tax 22% for corporate promoters. For non-corporate promoters, the effective tax will be 30%," Sitharaman said in her Budget speech.

"This brings greater tax efficiency to the gains on buyback of shares, other than for promoters, where the tax rate is sought to be differentiated," said Gokul Chaudhri, president - tax, Deloitte India.

Explaining her comment on nominal GDP, Sitharaman pointed out that inflation has been low. India's real GDP is projected to grow 6.8–7.2% in FY27, as per the Economic Survey for FY26. That assumes the GDP deflator--a combination of both CPI and WPI inflation rates with a higher share of the latter--at 3.2-2.8%. The nominal GDP growth projection is strictly based on the current economic situation, including India-US trade dynamics, Thakur said. 

Besides low inflation, India's other economic fundamentals are also strong amid the tumultuous global landscape, Sitharaman said. While no Budget proposal emanates primarily from global uncertainties, all officials involved in the Budget were cognisant of the geopolitical situation and had global uncertainties on their mind, the finance minister said, while answering a question on defence spending. The government's defence spending estimate for FY27 has jumped 20% to INR 5.95 trillion from INR 4.92 trillion estimated in the Budget estimate for FY26. The government has also raised the defence spending estimate for FY26 to INR 5.68 trillion. The rise in defence spending comes after India's 'Operation Sindoor' last year against terrorist bases in Pakistan. 

Reported by Krity Ambey and Priyasmita Dutta

Edited by Avishek Dutta

GOVT TO LAUNCH SCHEME FOR DEVELOPING CHEMICAL PARKS IN STATES

=============================================================

 In order to enhance domestic chemical production and cut dependence on imports, the government will launch a scheme to support states in establishing three dedicated chemical parks, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday.

"We will launch a scheme to support states in establishing 3 (three) dedicated chemical parks, through challenge route, on a cluster-based plug-and-play model," Sitharaman said. 

Reported by Vaishali Tyagi

Edited by Akul Nishant Akhoury

TO SET UP INSTITUTES TO TRAIN HEALTH PROFESSIONALS IN 10 DISCIPLINES

====================================================================

The government has decided to upgrade existing institutions for allied health professionals and set up new ones across the public and private sectors, Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2026–27 (April–March) in the Lok Sabha Sunday.

The initiative will cover 10 selected allied health disciplines, including optometry, radiology, anaesthesia, operational theatre technology, applied psychology, and behavioural health. Through this expansion, the government aims to add around 100,000 allied health professionals over the next five years, Sitharaman said.

Additionally, the Centre plans to build a robust care ecosystem encompassing geriatric and allied care services. To support this, a range of programmes aligned with the National Skills Qualifications Framework will be developed to train multi-skilled caregivers who combine core caregiving competencies with allied skills such as wellness, yoga, and the operation of medical and assistive devices. As part of this effort, 150,000 caregivers are expected to be trained in the coming year. 

Reported by Udita S. Jaiswal 

Edited by Rajeev Pai

TO HIKE OVERALL INVEST CAP FOR PROIS UNDER PORTFOLIO SCHEME TO 24%

==================================================================

The government will raise the overall investment limit for individual Persons Residing Outside India (PROI) under the 'Portfolio Investment Scheme', Finance Minister Nirmala Sitharaman said in Parliament Sunday, presenting the Budget for 2026-27 (Apr-Mar). The government has proposed increasing the investment limit for an individual PROI under this scheme from 5% to 10%, with an overall investment limit for all individual PROIs rising from 10% to 24%, Sitharaman said.

The government will also review the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, to boost foreign direct investment and foreign institutional investment. "I propose a comprehensive review of the Foreign Exchange Management (Non-debt Instruments) Rules to create a more contemporary, user-friendly framework for foreign investments, consistent with India's evolving economic priorities," Sitharaman said. 

Reported by Shweta

Edited by Saji George Titus

TO SET UP HIGH-POWERED COMMITTEE TO ASSESS IMPACT OF AI ON JOBS

===============================================================

The government plans to set up a high-powered 'Education to Employment and Enterprise' Standing Committee to assess the impact of emerging technologies, including artificial intelligence, on jobs and skill requirements and propose adequate measures, Finance Minister Nirmala Sitharaman said, presenting the Union Budget Sunday.

The committee will also recommend measures that focus on the services sector as a core driver of Viksit Bharat, Sitharaman said. "This will make us a global leader in services, with a 10% global share by 2047." 

The committee will focus on areas to enhance growth, employment and exports in the services sector. It will also identify sector-specific gaps and policy and regulatory issues.

The committee will "propose specific measures for embedding AI in the education curriculum from school level onwards and upgrading State Councils of Educational Research and Training institutes for teacher training," according to the indicative terms of reference. It will also propose measures to upskill and reskill technology professionals and engineers in AI and emerging technologies. 

Reported by Nandini Sinha 

Edited by Saji George Titus

INR-100-BLN OUTLAY FOR CONTAINER MANUFACTURING SCHEME OVER 5 YEARS

===================================================================

Finance Minister Nirmala Sitharaman Sunday announced an outlay of INR 100 billion for a container manufacturing scheme over the next five years in the Union Budget for 2026-27 (Apr-Mar) aimed at creating a globally competitive container manufacturing ecosystem. 

The scheme aims to significantly scale up domestic production capacity by incentivising domestic manufacturers. India's current container manufacturing capacity is around 30,000 units per year, significantly lower than China's 6 million units per year, according to Fortune India. 

"Container manufacturing is dominated by China (95% share). A dedicated Rs 10,000 crore (INR 100 billion) assistance will provide a good base to propel domestic investments and manufacturing in this space," according to Crisil. "This is a labour-intensive industry and needs something called Corten steel. This will help India create a footprint in global trade and bring down the dependence on China for the vital boxes," it added. 

The Budget allocation reflects the government's strategic focus on strengthening India's railway-led logistics ecosystem by improving cargo mobility, lowering freight costs, and enhancing supply chain efficiency, said Divyam Mour, research analyst, SAMCO Securities, in a note. 

"Higher availability of modern containers will accelerate modal shift from road to rail, enabling faster turnaround times and more economical bulk transportation for industries such as manufacturing, agriculture, and exports. This is structurally positive for rail-linked logistics and equipment players, particularly Texmaco Rail & Engineering Ltd., which is well positioned in rail infrastructure and fabrication, and Container Corp. of India Ltd., the country's dominant container freight operator," Mour added. 

Shares of select cargo-related stocks came off highs after rising 2-6% when Sitharaman announced the establishment of a new dedicated freight corridor and high-speed city rail corridors. At 1448 IST, shares of Container Corp. of India, VLR Logistics, and JSW Infrastructure were up 0.2-1.2%.

Reported by Afra Abubacker

Edited by Akul Nishant Akhoury

PENALTY FOR INACCURATE OR NON-REPORTING OF CRYPTO ASSETS TRANSACTION

====================================================================

The Union Budget for 2026-27 (Apr-Mar) Sunday imposed penalties for non-reporting or giving inaccurate information of statements regarding transactions on crypto assets. This is to ensure compliance with Section 509 of the Income Tax Act, 1961, which relates to furnishing of information in respect of a transaction of a crypto-asset.

A penalty of INR 200 per day for non-furnishing of statements and INR 50,000 for furnishing inaccurate particulars and failure to correct such inaccuracy will be levied, said Finance Minister Nirmala Sitharaman, while presenting the FY27 Budget in the Lok Sabha. Last year, the Central Board of Direct Taxes had identified undisclosed income worth INR 8.89 billion from virtual digital assets, which include cryptocurrency and other non-fungible tokens stored, invested and traded in blockchain.

Further, the government has rationalised the prosecution framework under the Income Tax Act while maintaining a careful balance for deterrence in some serious offences. Non-production of books of account and documents, and requirement of tax deducted at source payment, where payment is made in kind, are being decriminalised, said the government. Moreover, minor offences will attract fines only, it added.

The remaining prosecutions will be graded commensurate with the quantum of offence, said the government, They will entail only simple imprisonment, with the maximum imprisonment reduced to two years, and power to courts to convert even those into fines, the government said. In cases where presently the maximum punishment is two years, the quantum of punishment has been reduced to six months with or without fine and with no minimum imprisonment, said the government.

The prosecution for offences under the Income Tax Act, 2025 shall be based on the amount of tax evaded and the punishment shall be proportionate to the gravity of the crime, said the government. In such cases, the requirement of maximum punishment of imprisonment has been done away with, and the requirement of mandatory fine has also been made optional, it said. Further, for minor offenses, only a fine needs to be furnished, said the government. 

Reported by Surya Tripathi

Edited by Tanima Banerjee

TO RATIONALISE PROVISIONS OF RECOGNISED PROVIDENT FUNDS

=======================================================

The government has proposed an overhaul of tax rules governing recognised provident funds to ensure compliance and simplify the rules to bring them in line with existing employee provident fund norms. Presenting the Union Budget for 2026–27 (Apr–Mar) in the Lok Sabha on Sunday, Finance Minister Nirmala Sitharaman said the changes aim to rationalise Schedule XI of the Income-tax Act, which lays down conditions for a provident fund to qualify for tax benefits.

A recognised provident fund is a retirement savings scheme set up by an employer and approved by the government. Contributions made to such funds, subject to conditions, enjoy tax exemptions for both employers and employees.

The government plans to remove parity-based rules, percentage caps, and special relaxations tied to salary levels or shareholder status, the Budget proposed. It also proposed to align the eligibility for recognition of provident funds with exemption rules under Section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 – the main law governing EPFO-managed retirement savings.

In addition, investment-related provisions in Schedule XI will be modified to remove rigid statutory caps that do not match prevailing norms followed by the Employees' Provident Fund Organisation. 

Reported by Pallavi Singhal

Edited by Avishek Dutta

CENTRE'S FLAGSHIP EV SCHEME TO GET INR 15 BLN FOR FY27

======================================================

The Union Budget for 2026-27 (Apr-Mar) has proposed an outlay of INR 15 billion for the Centre's flagship scheme for the promotion of electric vehicles in India, the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-Drive) scheme. The government had budgeted an outlay of INR 40 billion for the scheme for 2025-26 (Apr-Mar), which has been revised lower to INR 13 billion. 

The scheme was introduced in September 2024 to replace the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India scheme, which was active from 2015 to 2024. The PM E-Drive scheme became the flagship scheme to promote electric vehicles from October 2024. While the PM E-Drive scheme was originally meant to be active for two years, it was extended till Mar. 31, 2028, for specific segments such as electric buses, electric trucks, and electric ambulances. The terminal date for electric two- and three-wheelers is Mar. 31, though the overall outlay for the scheme remains unchanged at INR 109 billion over four years.

In FY25, the government incurred INR 9.93 billion towards this scheme. As of Dec. 31, the ministry had disbursed INR 17.03 billion in claims to companies for the sale of 2.14 million electric vehicles under the scheme. 

Under the scheme, the government earmarked INR 17.72 billion for electric two-wheelers and INR 9.07 billion for electric three-wheelers. Electric ambulances and trucks were allocated INR 5 billion each. Additionally, the scheme provided INR 43.91 billion for electric buses and INR 20 billion for the installation of charging stations for electric vehicles.  

Reported by Anand JC

Edited by Saji George Titus

PROPOSES INTEGRATED PROGAMME TO BOOST TEXTILE MANUFACTURING

============================================================

To scale up manufacturing in the labour-intensive textile sector, the government has proposed an integrated programme, Finance Minister Nirmala Sitharaman said, presenting the Union Budget for 2026–27 (Apr–Mar) in the Lok Sabha on Sunday. The programme includes the National Fibre Scheme, the Textile Expansion and Employment Scheme, the National Handloom and Handicraft programme, the Tex-Eco Initiative, and Samarth 2.0, Sitharaman said. 

The National Fibre Scheme is proposed to make the country self-reliant in natural fibres such as silk, wool and jute, man-made fibres, and new-age fibres. The Textile Expansion and Employment Scheme aims to modernise traditional clusters with capital support for machinery and technology upgrades, as well as common testing and certification centres, while the National Handloom and Handicraft programme aims to integrate and strengthen existing schemes and ensure targeted support for weavers and artisans. The Tex-Eco Initiative is proposed to promote globally competitive and sustainable textiles and apparel, and Samarth 2.0 to modernise and upgrade the textile training ecosystem through collaboration with industry and academic institutions, Sitharaman said.

Sitharaman also proposed the setting up of Mega Textile Parks in "challenge mode," which can also focus on bringing value-addition to technical textiles.

To strengthen khadi, handloom, and handicrafts, the finance minister proposed to launch the Mahatma Gandhi Gram Swaraj initiative. The initiative will assist with global market linkage and branding, and will streamline and support training, skilling, process quality, and production. "This will benefit our weavers, village industries, One–District–One–Product initiative and rural youth," the minister said. 

Reported by Shreya Shetty

Edited by Saji George Titus

GOVT TO SET UP INFRASTRUCTURE RISK GUARANTEE FUND FOR LENDERS

=============================================================

The government will establish an Infrastructure Risk Guarantee Fund to offer prudently calibrated partial guarantees to lenders, Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2026–27 (Apr–Mar) in the Lok Sabha on Sunday. The proposed fund is aimed at mitigating risks associated with the infrastructure development and construction phase, thereby enhancing lender confidence and encouraging greater participation from private developers, she said.

Separately, Sitharaman noted that real estate investment trusts have emerged as an effective and successful mechanism for asset monetisation in recent years. Building on this momentum, the Centre plans to accelerate the recycling of substantial real estate assets held by central public sector enterprises by setting up dedicated real estate investment trusts.

Reported by Udita S. Jaiswal

Edited by Vandana Hingorani

PROPOSES INR 100 BLN GROWTH FUND, LIQUIDITY SUPPORT FOR MSMES

==============================================================

The Budget has proposed a three-pronged approach to support micro, small and medium enterprises, providing equity, liquidity and professional support. Presenting the Budget for 2026-27 (Apr-Mar), Finance Minister Nirmala Sitharaman said a dedicated INR 100 billion SME Growth fund has been proposed to create future champions to incentivise enterprises based on select criteria.

The government also plans to boost the Self-Reliant India Fund established in 2021, topping it up with INR 20 billion. The additional fund will continue to support micro enterprises and maintain their access to risk capital, she said.

The 2021 self-reliant fund was set up to infuse INR 500 billion in equity funding into MSMEs with the potential and viability to become large units. Under this Fund, INR 100 billion was to be provided by the government, and INR 400 billion by private equity and venture capital funds.

The government has also announced measures to facilitate faster payment of dues to small enterprises to settle transactions through the Trade Receivables Discounting System (TReDS) platform, introducing a credit guarantee support mechanism through CGTMSE for invoice discounting, and introducing TReDS receivables as asset-backed securities, helping develop a secondary market, improving liquidity and settlement of transactions.

TReDS is a platform that allows smaller enterprises to discount invoices receivable through an auction mechanism, helping them receive the due amount quickly for goods and services supplied to corporates.

To help MSMEs better manage compliance, the government announced the development of a cadre of 'corporate mitra.' The aim is to ease the compliance burden for MSMEs through these professionals at an affordable cost, Sitharaman said.

The Budget has allocated INR 245.66 billion to the Ministry of Micro, Small and Medium Enterprises for 2026-27, more than double the revised estimates for 2025-26. However, more than 70% of this increase stems from an INR 90 billion allocation for the Guarantee Emergency Credit Line facility to eligible MSME borrowers, which was part of the budget estimates for FY26 but excluded from the revised FY26 estimates.

Reported by  Suryash Kumar

Edited by Saji George Titus

IMMUNITY ON NON-DISCLOSURE OF SOME FOREIGN ASSETS FROM OCT 2024

===============================================================

The government has proposed to provide immunity from non-disclosure of non-immovable foreign assets with retrospective effect from Oct. 1, 2024, Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2026-27 (Apr-Mar) on Sunday.

"There is no penalty presently for non-disclosure of non-immovable foreign assets with aggregate value less than 20 lakh rupees (INR 2 million). I propose to also provide them with immunity from prosecution with retrospective effect from 1.10.2024 (Oct. 1, 2024)," Sitharaman said.

This proposal was part of a wider set of tax proposals, including integration of assessment and penalty proceedings, to avoid multiplicity. Moreover, penalties for certain technical defaults such as failure to get accounts audited, non-furnishing of transfer pricing audit report, and default in furnishing statement for financial transactions, are proposed to be converted into fee

Reported by Kabir Sharma 

Edited by Ashish Shirke

TAXPAYERS CAN UPDATE RETURNS EVEN AFTER REASSESSMENT PROCEEDINGS

================================================================

In a measure to reduce litigation and help taxpayers, the Union Budget for 2026-27 (Apr-Mar) allowed the taxpayers to update their returns even after reassessment proceedings have been initiated at an additional 10% tax rate over and above the rate applicable for the relevant year. The assessing officer will use the updated return in proceedings, Finance Minister Nirmala Sitharaman said, presenting the Budget in the Lok Sabha.

The government said that taxpayers will be allowed to file updated returns in cases where taxpayers reduce the amount of loss filed in the original return under section 263(1) of the Income Tax Act, 1961. Where the taxpayer filed an updated return and reports additional income, then the penalty shall not be leviable on such additional income, the government said.

The Budget has extended immunity from penalties and prosecution to cases of income misreporting. There is already a framework for immunity from penalty and prosecution in the cases of underreporting. However, in such cases, the taxpayer will need to pay 100% of the tax amount as additional income tax over and above the tax and interest due, the government said. The misreporting of income with respect to unexplained cash credit is proposed to be settled with a payment of 120% of the tax. In such cases, immunity shall not be granted where prosecution is initiated, the government said.

Presently, there is a special tax rate on certain incomes in the nature of cash credits and unexplained investments, where the tax rate is 60% and the penalty is 10% of the tax. The government has decided to rationalise the tax rate on these incomes to 30%. Penalty on such an amount would be merged with the penalty for underreporting of income in consequence of misreporting of income, which is 200% of the tax amount, the government said.

Further, the government has integrated assessment and penalty proceedings through a common order to reduce the multiplicity of proceedings. There will be no interest liability on the taxpayer for the penalty amount during the period of appeal before the first appellate authority, irrespective of the outcome of the appeal, the government said. The quantum of pre-payment has been reduced from 20% to 10% and will continue to be calculated only on the core tax demand, the government said.

Penalties for certain technical defaults, such as failure to get accounts audited, non-furnishing of the transfer pricing audit report, and default in furnishing the financial transactions statement, are proposed to be converted into a fee, the government said.

Reported by Surya Tripathi

Edited by Saji George Titus

PROPOSES INR 100 BLN OUTLAY FOR BIOPHARMA SHAKTI FOR 5 YEARS

=============================================================

The Union Budget for 2026-27 (Apr-Mar) proposed an outlay of INR 100 billion over the next five years for Biopharma SHAKTI to position India as a global biopharma manufacturing hub. Biopharma SHAKTI is expanded as Strategy for Healthcare Advancement through Knowledge, Technology, and Innovation. 

"This will build the ecosystem for domestic production of biologics and biosimilars," Finance Minister Nirmala Sitharaman said in her Budget speech Sunday. She noted that India has been observing a growing burden of non-communicable diseases such as diabetes, cancer, and autoimmune disorders, making biologic medicines critical for improving longevity and quality of life at affordable costs. 

Under Biopharma SHAKTI, the government will set up a biopharma-focused network, including three new National Institutes of Pharmaceutical Education and Research, while upgrading seven existing ones. The programme will also create a network of over 1,000 accredited clinical trial sites across the country. 

"We propose to strengthen the Central Drugs Standard Control Organisation to meet global standards and approval timeframes through a dedicated scientific review cadre and specialists," Sitharaman said. 

Shares of some pharmaceutical stocks surged after Sitharaman announced a higher Budget allocation in FY27 for the enhancement and development of healthcare facilities in India. Max Healthcare Institute was the top gainer in the Nifty 50 index, rising over 3%, followed by Sun Pharmaceutical Industries and Apollo Hospital Enterprises, which was up around 1% each. Global Health rose over 6% and was among the top gainers in the Nifty 500 index.

Reported by Afra Abubacker

Edited by Tanima Banerjee

GOVT ALLOCATES INR 50 BLN PER CITY ECONOMIC REGION OVER FIVE YEARS

==================================================================

In a bid to expand its focus to Tier II and Tier III cities and temple towns, the government has allocated INR 50 billion per 'city economic region' over five years. "This Budget aims to further amplify the potential of cities to deliver the economic power of agglomerations by mapping city economic regions, based on their specific growth drivers," Finance Minister Nirmala Sitharaman said, presenting the Union Budget for 2026-27 (Apr-Mar), in the Lok Sabha Sunday.

The Centre aims to implement the development plans for these cities through a challenge mode with a reform-cum-results based financing mechanism, Sitharaman said.

The Centre aims to implement the development plans for these cities through a challenge mode with a reform-cum-results based financing mechanism, as per Sitharaman.

"We shall continue to focus on developing infrastructure in cities with over 5 lakh population (Tier II and Tier III), which have expanded to become growth centres," Sitharaman said earlier in her speech.

Reported by Shakshi Jain

Edited by Saji George Titus

TAX HOLIDAY TILL 2047 TO FOREIGN COS PROVIDING CLOUD SVCS FROM INDIA

======================================================================

Finance Minister Nirmala Sitharaman Sunday outlined a series of steps the government would undertake to attract global businesses and investments. The centre has proposed a tax holiday till 2047 to foreign companies that provide cloud services to customers globally by using data centre services from India, Finance Minister Nirmala Sitharaman said while presenting the Union Budget. However, these companies will need to provide services to Indian customers through an Indian reseller entity.

In case the company providing the data centre service from India is a related entity, the government will also allow a safe harbour of 15% on cost. The finance minister also announced a safe harbour to non-resident Indians providing component warehousing in a bonded warehouse at a 2% profit magin.

To boost toll manufacturing in India, Sitharaman said the government would provide a five-year income tax exemption to NRIs who provide capital goods, equipment or tooling to any toll manufacturer in a bonded zone.

"I propose to provide exemption to global (non-India sourced) income of a non-resident expert, for a stay period of 5 years," Sitharaman said as the government aims to attract global talent to work in India. The government would also provide exemption from Minimum Alternate Tax to all NRIs who pay tax on a presumptive basis.

Reported by Nandini Sinha

Edited by Pankaj Aher

ALLOCATION UNDER MGNREGA ONLY TO CLEAR PAST DUES - EXPENDITURE SECY

===================================================================

The government has earmarked INR 300 billion in the Union Budget 2026–27 (Apr-Mar) only to clear pending liabilities under the Mahatma Gandhi National Rural Employment Guarantee Act, V. Vualnam, secretary, Department of Expenditure, Ministry of Finance, said during a post-budget press conference Sunday. 

In contrast, the government has allocated INR 956.92 billion for the newly introduced Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin), that will replace MGNREGA from the next financial year. The allocation for MGNREGA is limited to the settlement of outstanding dues, as the employment guarantee scheme is being formally replaced by the VB-G RAM G framework, the secretary explained.

The new Act is expected to be notified by the Centre from April 1, following which states will be given a six-month transition period to notify and implement the legislation individually.

Reported by Priyasmitta Dutta and Krity Ambey

Written by Pallavi Singhal

Edited by Deepshikha Bhardwaj

GOVT TO LAUNCH ISM 2.0; UPS OUTLAY FOR ELECTRONICS COMPONENT SCHEME

===================================================================

The government will launch India Semiconductor Mission 2.0 to produce equipment and materials, design full-stack Indian intellectual property, and fortify supply chains, Finance Minister Nirmala Sitharaman said, presenting the Union Budget for 2026-27 (Apr-Mar) in the Lok Sabha Sunday. The government also proposes to increase the outlay for the Electronics Components Manufacturing Scheme to INR 400 billion, she added.

The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of INR 229.29 billion, has already garnered investment commitments that exceed its initial target by double, Sitharaman said. This scheme aims to build a self-sustaining ecosystem for electronics component manufacturing in India through large investments.

As part of ISM 2.0, the Centre will also focus on industry-led research and training centres to develop technology and a skilled workforce, Sitharaman said. "India Semiconductor Mission 2.0 aims to expand chip manufacturing capacity, strengthen supply chains for electronics, EVs (electric vehicles), defence and high-tech sectors, and reduce dependence on external sources for critical technologies," a government post on X said.

This announcement aims o build on the India Semiconductor Mission 1.0, which was launched in December 2021 with an outlay of INR 760 billion to incentivise companies to set up smiconductor manufacturing facilities in India. 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Shakshi Jain

Edited by Saji George Titus

GOVT PROPOSES TAX RELIEFS MEASURES FOR COOPERATIVE SOCIETIES

============================================================

The government has proposed tax reliefs for cooperative societies in the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on Sunday. These measures are aimed at supporting primary and federal co-operatives and preventing double taxation of dividend income.

As per the Budget proposals, deduction of profit and gains, which is currently allowed to primary co-operative societies supplying milk, oilseeds, fruits, or vegetables raised or grown by their members to federal co-operatives, will be extended to primary co-operatives engaged in supplying cattle feed and cotton seed to federal co-operative societies and government organisations.

The government also proposed deduction of inter-co-operative society dividend income under the new tax regime, to the extent such dividend is further distributed to the members. At present, this deduction is available only under the old tax regime, and its non-allowance under the new regime may result in double taxation, as it may be taxed in the hands of the members on further distribution by the cooperative societies.

The Budget proposes to allow exemption on dividend income received by a notified national federal co-operative from a company under the new tax regime for three years. This deduction is limited to the dividend received on investments made up to Jan. 31, 2026, and will be available only to the extent that such dividends are further distributed to the members of the co-operatives.  End

Reported by Divya Moolayattil

Edited by Saji George Titus

PEGS FY27 DEFENCE EXPENDITURE AT INR 5.94 TLN, UP 4.7% ON YEAR
==============================================================

The Union Budget presented by the Finance Minister Nirmala Sitharaman on Sunday projected an outlay of INR 5.946 trillion for defence expenditure in 2026-27 (Apr-Mar), up 4.7% from the revised estimate of INR 5.679 trillion for FY26. Of the total outlay, INR 3.65 trillion will be spent on revenue expenditure and INR 2.19 trillion on capital expenditure.

The defence outlay accounts for 1.5% of GDP in FY27, marginally lower than the revised FY26 estimate of 1.6% of GDP. The revised outlay for defence spending in FY26 exceeds the Budget estimate of INR 4.92 trillion.

As per the Budget documents, total defence spending in FY27, including civilian and pension expenditure, will be INR 7.85 trillion, up 7.1% from the revised estimate of INR 7.33 trillion for FY26.

Reported by Priyasmita Dutta and Nandini Sinha

Edited by Saji George Titus

GOLD BONDS TAX-FREE IF BOUGHT AT ISSUANCE, HELD TILL MATURITY

===============================================================

The government has proposed to provide capital gains tax exemption on sovereign gold bonds only when individuals subscribe to them at the time of original issue and these are held until redemption on maturity, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday.

"It is also proposed to provide that this exemption applies uniformly to all issuances of sovereign gold bonds by the Reserve Bank of India," Sitharaman said. 

The government, through RBI, last issued sovereign gold bonds in February 2024. The gold bonds scheme was introuced in 2015 to curb heavy imports of the precious metal. Investors in the bonds are paid 2.5% interest per annum.

Reported by Vaishali Tyagi

Edited by Avishek Dutta 

STT HIKE ON F&O TRADES TO CURB SPECULATIVE TRADING, SITHARAMAN SAYS

=====================================================================

The government has raised the Securities Transaction Tax on futures and options to discourage speculative trading, Finance Minister Nirmala Sitharaman told reporters in a press conference after presentation of the Union Budget for 2026-27 (Apr-Mar).

The budget proposes raising the securities transaction tax on futures contract transactions to 0.05% from 0.02% and that on options premium and exercise of options to 0.15% each from 0.1% and 0.125%, respectively. "We are not against it and respect the activity that takes place. But how can government keep quiet when we see losses to such small investors," Sitharaman said. "So this nominal increase is aimed purely at high speculation. Only to deter them."

Before finance minister, revenue secretary Arvind Shrivastava, too, said that the only change in STT is only for F&O trades and that the intention was to discourage speculative trading and handle systemic risk in derivatives market. "It is felt that when you look at the volume of the transactions of futures and options, whether you compare it to the size of the GDP or size of the underlying securities market, it is largely in the realm of heavy speculation, which results in losses to the small, retail and unsophisticated investors."

Reported by Sunil Raghu

Edited by Akul Nishant Akhoury

GOVT TO FOCUS ON TOURISM VIA MEDICAL HUBS, CULTURAL CENTRES

===========================================================

The government aims to promote tourism by establishing five regional medical hubs and developing 15 archeological sites into cultural destinations, Union Finance Minister Nirmala Sitharaman said in her Budget speech for 2026-27 (Apr-Mar) on Sunday. The government has also proposed to set up a National Institute of Hospitality and National Destination Digital Knowledge Grid in order to generate employment through tourism, she said.

The medical hubs will be established in partnership with the private sector, and will serve as integrated healthcare complexes, Sitharaman said. These centres will have Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy (AYUSH) centres, medical value tourism facilitation centres, and infrastructure for diagnostics, post-care and rehabilitation. In order to promote AYUSH, the government has proposed setting up three new All India Institutes of Ayurveda, and upgrading AYUSH pharmacies and drug testing labs. The government also plans to upgrade the World Health Organization global traditional medicine centre in Jamnagar to bolster evidence-based research, training and awareness for traditional medicine.

In order to promote cultural sites, the finance minister said that these would have curated walkways, immersive storytelling skills and technologies to conserve labs, interpretation centres and guides. The government has also proposed a pilot scheme for upskilling 10,000 guides at 20 tourist sites through a standardised, high-quality 12-week training course in hybrid mode, in collaboration with Indian Institute of Management. In order to promote trekking and hiking, the government plans to develop mountain trails in Himachal Pradesh, Uttarakhand and Jammu & Kashmir, the finance minister said.

The government also plans to develop Araku Valley in the Eastern Ghats, Podhigai Malai in the Western Ghats and key nesting sites in the coastal areas of Odisha, Karnataka, and Kerala. The government also plans to develop bird watching trails along the Pulikat lake in Andhra Pradesh and Tamil Nadu. This year, the government will host the first global big cat summit where 95 countries will deliberate on collective strategies for conservation, Sitharaman said. The government established the International Big Cat Alliance in 2024.

Reported by Astha Oriel

Edited by Avishek Dutta

TO SUPPORT RARE EARTH CORRIDORS IN ODISHA, KERALA, ANDHRA, TAMIL NADU

======================================================================

The government will support the mineral-rich states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, and research and manufacturing, Finance Minister Nirmala Sitharaman said in her speech while presenting the Union Budget for 2026-27 (Apr-Mar) to the Lok Sabha. 

Rare earths are a group of 17 elements, including 15 silvery-white metals called lanthanides, or lanthanoids, plus scandium and yttrium. India has a substantial base of rare-earth minerals, particularly monazite deposits located across several coastal and inland regions. These deposits contain about 13.15 million tonnes of monazite, holding an estimated 7.23 million tonnes of rare-earth oxides. These occur in coastal beach sands, teri/red sands, and inland alluvium in Andhra Pradesh, Odisha, Tamil Nadu, Kerala, West Bengal, Jharkhand, Gujarat, and Maharashtra. These oxides serve as the primary raw material for downstream rare-earth industries, including permanent magnet manufacturing. 

In late 2025, the Union Cabinet had approved a scheme to promote manufacturing of sintered rare earth permanent magnets with an outlay of INR 72.80 billion. While India has a strong rare earth resource base, domestic production of permanent magnets is still evolving and imports continue to meet a large part of current requirements. Official trade data indicates that India sourced a major share of its permanent magnet imports from China during 2022–23 to 2024–25. 

Reported by Prateem Rohanekar

Edited by Deepshikha Bhardwaj 

TO DOUBLE 100% TAX DEDUCTION TIMELINE TO 20 YEARS FOR IFSC UNITS

==================================================================

In order to increase the competitiveness of the International Financial Services Centre, the Union Budget for 2026-27 (Apr-Mar) has proposed to increase the period of 100% tax deduction for income for units in IFSC to 20 consecutive years out of 25 years and for offshore banking units to 20 consecutive years. Earlier, the 100% tax deduction on income for IFSC units was available for 10 consecutive years out of 15, and for offshore banking units 10 consecutive years. 

The Budget has also proposed that the business income of these IFSC units will be taxed at 15% after the expiry of the deduction period. Further, the government has proposed to rationalise the provisions of deemed dividend applicable to treasury centre in IFSC, saying that provisions of deemed dividend will not be applicable if the parent entity or the principal of the group is listed in a country or territory outside India or such parent entity and other group entity to the transaction is located in a country or territory outside India. 

Reported by Pratiksha

Edited by Saji George Titus 

EXTENDS TIME TO REVISE INCOME TAX RETURNS TO MAR 31 WITH SMALL FEE

==================================================================

In a relief to taxpayers who miss the initial deadline of Dec. 31, the Union Budget for 2026-27 (Apr-Mar) Sunday has extended the time available for revising income tax returns to Mar. 31, with the payment of a nominal fee. Going ahead, this revised return can be of original return or belated return, Finance Minister Nirmala Sitharaman said while presenting the Budget in the Lok Sabha.

A nominal fee of INR 1,000 or INR 5,000 is to be paid where the revision of original or belated return is made after Dec. 31, depending upon whether the income is up to or more than INR 500,000. 

Earlier, the revised income tax return could only be filed up to Dec. 31 following the tax year. Further, the income tax return filing period earlier extended up to Oct. 31 for persons engaged in international transactions under section 92E under the Income Tax Act, 1961.

The government has also staggered the timeline for filing of tax returns. Individuals with ITR 1 and ITR 2 returns will continue to file till Jul. 31 and non-audit business cases or trusts are proposed to be allowed time till Aug. 31. 

In July, the government had announced a comprehensive review of the Income Tax Act, 1961. This was completed in a record time and the Income Tax Act, 2025 will come into effect from Apr. 1, said Sitharaman. The simplified Income Tax Rules and forms will be notified shortly, she said, adding that it will give adequate time to taxpayers to acquaint themselves with its requirements. The forms have been redesigned such that ordinary citizens can comply without difficulty, she said.

Among other steps, the government said that tax deducted at source on the sale of immovable property by a non-resident is proposed to be deducted and deposited through resident buyer's permanent account number based challan instead of requiring tax deduction and collection account number. 

"For the ease of taxpayers holding securities in multiple companies, I propose to enable depositories to accept Form 15G or Form 15H from the investor and provide it directly to various relevant companies," said the government. Form 15G and Form 15H are tax exemption declaration forms filed by individuals to save tax deducted at source on incomes like bank interest, dividends, rent, and pension if the total income is below the basic exemption limit or a person's total tax liability for a year is nil. Form 15G is filled by any person who is below 60 years and Form 15H is filled by resident senior citizens aged 60 years or more. 

Reported by Surya Tripathi

Edited by Vandana Hingorani

FOCUS ON POLL-BOUND STATES WITH INDUSTRIAL, FREIGHT CORRIDORS

=============================================================

The Union Budget for 2026-27 (Apr-Mar) threw some light on poll-bound states with several infrastructure develoment related announcements for these regions. The Budget proposed the development of an east coast industrial corridor across five Purvodaya states, with a well-connected node at West Bengal's Durgapur. It also proposed to establish new dedicated freight corridors connecting Dankuni in West Bengal to Surat in Gujarat.

Assembly elections in West Bengal, Kerala, Tamil Nadu, and Assam are expected to be held in the first half of 2026.

Delivering the Budget speech in Lok Sabha Sunday, Finance Minister Nirmala Sitharaman said, "I propose the development of an integrated east coast industrial corridor with a well-connected node at Durgapur, creation of five tourism destinations in Purvodaya states, and the provision of 4,000 e-buses." The Purvodaya initiative aims to accelerate development in five eastern states of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh.

The finance minister also proposed to support mineral-rich states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research and manufacturing of rare earth minerals.

The finance minister also proposed to operationalise 20 new national waterways over the next five years in order to "promote environmentally sustainable movement of cargo". The first of these waterways will start in Odisha to connect mineral rich areas of Talcher and Angul, and industrial

centres like Kalinga Nagar to the ports of Paradeep and Dhamra.

She also said training institutes will be set up for development of the required manpower. This will benefit youth in the entire stretch of the waterways to train and acquire skills. A ship repair ecosystem catering to inland waterways will also be set up in Varanasi and Patna, she said.

"To enhance domestic chemical production and reduce import dependency, we will launch a scheme to support states in establishing three dedicated chemical parks, through challenge route, on a cluster-based plug-and-play model," she said.

She also proposed to develop seven high-speed rail corridors to promote environmentally sustainable passenger systems. These corridors are proposed between Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri.

She proposed to develop ecologically sustainable mountain trails in Himachal Pradesh, Uttarakhand, and Jammu and Kashmir; Araku Valley in the Eastern Ghats, and Podhigai Malai in the Western Ghats, "to offer world-class trekking and hiking experience". Besides, turtle trails along key nesting sites in the coastal areas of Odisha, Karnataka and Kerala; and bird watching trails along the Pulikat lake in Andhra Pradesh and Tamil Nadu will also be set up, she said.

Sitharaman proposed to launch a scheme for development of Buddhist circuits in Arunachal Pradesh, Sikkim, Assam, Manipur, Mizoram, and Tripura. The scheme will cover preservation of temples and monasteries, pilgrimage interpretation centres, connectivity and pilgrim amenities.  

Reported by Asim Khan

Edited by Tanima Banerjee

TO SUPPORT INCOMES OF WALNUT, ALMOND, PINE NUT FARMERS

======================================================

To boost farmer incomes and rejuvenate old, low-yielding orchards, the government has proposed a dedicated programme to promote high-density cultivation of walnuts, almonds and pine nuts, Finance Minister Nirmala Sitharaman said while announcing the Union Budget for 2026–27 (Apr–Mar) in the Lok Sabha on Sunday. The programme will also focus on value addition and greater engagement of rural youth, she said.

High-density cultivation refers to modern farming practices that increase plant population per hectare to improve productivity, optimise land use, and enhance returns for farmers, particularly in horticulture crops.

To create quality employment opportunities in rural and peri-urban areas, Sitharaman said the government will support entrepreneurship development in the animal husbandry sector. The support will include a credit-linked subsidy programme, scaling up and modernisation of livestock enterprises, creation of integrated value chains focused on livestock, dairy and poultry, and encouragement for the formation of Livestock Farmer Producer Organisations, she said.

Reported by Pallavi Singhal

Edited by Akul Nishant Akhoury

PEGS FY27 TRANSFER TO STATES AT INR 26.21 TLN, UP 12.2% ON YEAR

================================================================

The Budget on Sunday projected transfers to states and Union Territories in the next financial year starting April at INR 26.21 trillion, up 12.2% from the revised estimate of INR 23.36 trillion for FY26. The Budget for FY26 had projected the transfer to states at INR 25.60 trillion.

The Budget for FY27, presented by Finance Minister Nirmala Sitharaman in Parliament, projected devolution of taxes to states at INR 15.26 trillion, up 9.6% from the revised estimate of INR 13.93 trillion in FY26.

The next financial year is the first year under the 16th Finance Commission's recommendations, which recommended that the government transfer 41% of taxes to states as their share, the same as the 15th Finance Commission's recommendation.

The Budget projected the transfer of Finance Commission grants to states at INR 1.23 trillion, down 15.4% from the revised estimate for FY26.

The following table details the transfer of resources to states and Union Territories with legislature as per the Budget proposals (in INR billion):

Reported by Priyasmita Dutta and Gunjan Rajput

Edited by Saji George Titus

FY27 MKT BORROW NOT HIGH, HAVE PLAN TO MANAGE REPAYMENTS - ECON SECY

=====================================================================

The government's gross market borrowing of INR 17.20 trillion for 2026-27 (Apr-Mar) is not "on the higher side", Economics Affairs Secretary Anuradha Thakur said Sunday. The gross borrowing number is seen rising next year mainly because of higher repayments, while net market borrowing is seen similar to the last few years, Thakur said. 

"On borrowing, no, we don't think it is on the higher side. The net market borrowing is in the range of (INR) 11.73 (trillion), around the number it has been over the last couple of years," Thakur said at a post-Budget press conference. "To that extent, we don't think it's a large number. We have a plan on how to manage this (market borrowing)," Thakur said. 

The government lowered its gross market borrowing estimate for FY26 to INR 14.61 trillion from INR 14.82 trillion in the Budget estimate. On net basis, the government will sell bonds worth INR 11.73 trillion in FY27. Gross market borrowing is higher because of the scheduled INR 5.5 trillion worth of repayments in FY27. According to an Informist poll, the government was seen targeting net issuance of dated securities at INR 11.60 trillion in FY27 and a gross market borrowing of INR 16.30 trillion.

Asked if the government will look at gilt switches, including the Reserve Bank of India, and buybacks to lower the repayment burden for FY27, Thakur said such decisions will be taken closer to redemption of those bonds.

According to Budget documents, the government aims to switch INR 2.50 trillion worth of bonds in the next fiscal year, higher than the revised estimate of INR 1.64 trillion for FY26. Government bond buybacks have been pegged at nil for FY27 in the Budget against INR 867.75 billion in FY26. 

Reported by Shubham Rana

Edited by Akul Nishant Akhoury

FY27 RBI SURPLUS, PSU BANK DIVIDEND SEEN AT INR 3.16 TLN, UP 4% YOY

====================================================================

The government on Sunday projected the surplus transfer from the Reserve Bank of India and dividend from public sector banks and financial institutions in 2026-27 (Apr-Mar) at INR 3.16 trillion, up 3.7% from the revised estimate of INR 3.05 trillion for FY26. The revised estimate for surplus transfer from the RBI and dividend from PSU banks in FY26 is INR 486 billion higher than the Budget estimate of INR 2.56 trillion. 

The RBI transferred a record INR 2.69 trillion as surplus to the government in FY26. Over the years, the RBI surplus transfer has become a crucial part of the government's non-tax revenues. The RBI transfers the surplus to the government for a particular year in May of the subsequent financial year.

The dividends from other public sector companies are projected at INR 750 billion in FY27, up 5.7% from the revised estimate of INR 710 billion. The Budget for FY26 had projected dividends from public sector enterprises at INR 690 billion. 

Reported by Priyasmita Dutta and Nandini Sinha

Edited by Saji George Titus

FY27 PSU CAPEX PEGGED AT INR 10.19 TLN, UP 12% ON YEAR

======================================================

The Union Budget has projected capital expenditure by public sector companies at INR 10.19 trillion in 2026-27 (Apr-Mar), up 11.8% from the revised estimate of INR 9.12 trillion for FY26.

The FY26 Budget had projected the capital expenditure by public sector companies at INR 9.67 trillion for the current financial year. Of the total capital expenditure by public sector undertakings in FY27, INR 5.04 trillion will be as equity support and INR 310.15 billion will be loans from the Budget.

According to the Budget document, the highest capital expenditure will be by the Indian Railways at INR 2.63 trillion, followed by the National Highways Authority of India at INR 1.87 trillion. These two entities will together spend 44% of total capital expenditure by public sector companies in 2026-27. 

The Budget has projected capital expenditure of Coal India Ltd. at INR 165.00 billion, Bharat Sanchar Nigam Ltd. at INR 289.73 billion, Indian Oil Corp. Ltd. at INR 286.41 billion, Oil and Natural Gas Corp. Ltd. at INR 300 billion, and NTPC Ltd. at INR 310.00 billion.

Reported by Shubham Rana and Divya Moolayattil 

Edited by Saji George Titus

LIST OF REVISED CUSTOMS DUTY AND CESS ON SOME ITEMS

===================================================

The Centre on Sunday announced changes in basic customs duty and cess in the Budget for 2026-27 (Apr-Mar). Customs duty is levied on imports and exports of goods and helps the government raise revenue. The Budget has estimated customs revenue for FY27 at INR 2.712 trillion compared with FY26 estimate of INR 2.400 trln.

The Centre revises customs duty rates based on broader economic policies, trade relations, and global market dynamics. Meanwhile, cess is levied on base tax with a specific purpose.

Following are the changes proposed in customs duty:

Reported by Ashutosh Pati

Edited by Vandana Hingorani 

GOVT TO SET UP NIMHANS-2; UPGRADE MENTAL HEALTH INSTITUTES IN RANCHI

====================================================================

The government has proposed to set up a National Institute of Mental Health and Neuro Sciences-2, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday. It will also upgrade National Mental Health Institutes in Ranchi and Tezpur as Regional Apex Institutions.

Emergencies expose families, particularly the poor and vulnerable, to unexpected expenditure. "We will strengthen and increase these capacities by 50% in district hospitals by establishing Emergency and Trauma Care Centres," she said.

To reaffirm commitment to mental health and trauma care, the government has proposed these measure. These measures will help empower vulnerables access mental health care, Sitharaman said.  

Reported by Taniva Singha Roy

Edited by Akul Nishant Akhoury

GOVT PEGS FY27 CAPEX AT INR 12.21 TLN, UP 11.5% ON YEAR

========================================================

The Union Budget on Sunday projected the central government's capital expenditure for the next financial year starting April at INR 12.21 trillion, up 11.5% from the revised estimate of INR 10.96 trillion for FY26. The revised capital expenditure for FY26 is INR 253 billion lower than the Budget estimate of INR 11.21 trillion.

The Centre's effective capital expenditure for FY27, including grants-in-aid for the creation of capital assets, is projected at INR 17.15 trillion, up 22.1% from the revised estimate of INR 14.04 trillion for FY26. Capital expenditure in FY27 accounts for 3.1% of GDP, the same as the revised estimate.

Announcing the Budget in Lok Sabha, Finance Minister Nirmala Sitharaman said the centre would provide capital expenditure loans to states amounting to INR 1.85 trillion.

The Narendra Modi government has increased capital expenditure by over six times since FY15.

In the first ten months of FY26, the government's capital expenditure totalled INR 7.88 trillion, up 15% year on year. This means the government has to spend INR 3.08 trillion in the remaining three months of the year to achieve the revised capital expenditure target. This translates to around INR 1.03 trillion capital expenditure each month. 

Reported by Priyasmita Dutta and Nandini Sinha

Edited by Saji George Titus

TO SET UP CONTENT CREATOR LABS IN 15,000 SCHOOLS, 500 COLLEGES

==============================================================

To promote the "Orange Economy," the government has proposed extending support to the Indian Institute of Creative Technologies, Mumbai, Finance Minister Nirmala Sitharaman said announcing the Union Budget for 2026-27 (Apr-Mar) in the Lok Sabha Sunday. This will be used to set up animation, visual effects, gaming and comics content creator labs. These labs will be established in 15,000 secondary schools and 500 colleges across the country, she said. 

Orange Economy refers to the part of the economy driven by creativity, culture, and intellectual property, comprising activities where value comes primarily from ideas, knowledge, artistic expression, and cultural content, rather than from physical goods.

"India's Animation, Visual Effects, Gaming, and Comics sector is emerging as a major employment generator, with industry estimates suggesting a requirement of nearly 2 million professionals by 2030. To build a robust talent pipeline, the government proposes extending support to the Indian Institute of Creative Technologies, Mumbai," Sitharaman said. 

Acknowledging the rapid expansion of the Indian design industry alongside a persistent shortage of trained domestic designers, Sitharaman proposed the establishment of a new National Institute of Design through the challenge route, aimed at enhancing design education and innovation, particularly in the eastern region of India. 

Reported by Pallavi Singhal

Edited by Pankaj Aher

THIS BUDGET WILL SPEED UP INDIA'S 'REFORM EXPRESS', SAYS PM MODI

================================================================

Prime Minister Narendra Modi Sunday said the Union Budget for 2026-27 (Apr-Mar) will give new speed to the "Reform Express" that India has "already boarded", and that it provides a foundation for a bright future.

The prime minister also hailed the major trade deals that India has concluded recently, especially the free trade agreement with the European Union, and said that these are going to benefit India's youth and micro, small, and medium enterprises.

"This Budget is unique in the way that it has focussed on reducing the fiscal deficit and keeping inflation under control while aligning with high capex and high growth targets," Modi said. 

The prime minister said that India is already the world's fastest growing economy, but "we are not satisfied with just this and now want to become the world's third-largest economy soon". "This is the resolve of India's 140 crore citizens," he said.

He said the amount of support to India's sunrise sectors in this Union Budget is "unprecedented". "The kind of support the MSMEs get in this Budget will give them strength to go global from local. Major steps have been taken to strengthen infrastructure such as dedicated freight corridor, development of new waterways and high-speed rail corridor," he said. 

Special attention to the development of tier 2 and tier 3 cities and push to municipal bonds will expedite development, according to the prime minister. "This is Yuva Shakti budget. The provisions in this budget will shape up leaders, innovators and creators in different sectors."

He also pointed out that tax relief concessions have been offered to make India a global data centre hub. He hailed the Union Budget as one aiming for "balanced growth". 

Reported by Asim Khan

Edited by Deepshikha Bhardwaj

FINAL MAT RATE TO BE CUT TO 14% FOR COS SHIFTING TO NEW TAX REGIME

==================================================================

The Union Budget has proposed reducing the Minimum Alternate Tax rate to 14% from 15% to facilitate companies' transition to the new tax regime. Companies opting for this regime will not be allowed to carry forward or claim MAT credit in future tax years in respect of such payments.

As MAT is proposed to be a final tax, no further MAT credit will accumulate from Apr 1. In line with this change, the final MAT rate has been reduced to 14%, while the MAT credit accumulated up to Mar. 31 will continue to be available for set-off, subject to the prescribed limits. "There shall be no allowance of credit in future tax years in respect of such payment," Finance Minister Nirmala Sitharaman said while presenting the Budget for 2026-27 (Apr-Mar).

The Budget has also allowed the set-off of brought-forward MAT credit accumulated up to tax year 2026-27 (Apr-Mar) only for domestic companies that shift to the new tax regime. "To encourage companies to shift to the new regime, set-off of brought forward MAT credit is proposed to be allowed to companies only in the new regime. Set-off using available MAT credit is proposed to be allowed to an extent of 1/4th of the tax liability in the new regime," Sitharaman said.

Such MAT credit available as of Apr. 1 can be set off in the new regime to the extent of 25% of the company's tax liability. The carried-forward MAT credit will remain available for utilisation only up to 15 years from the year in which the credit first arose.

For foreign companies, the Budget proposes that MAT credit set-off will be permitted to the extent of the difference between tax on total income and MAT, but only in those tax years where the normal tax liability exceeds the MAT liability. 

Reported by Narayana Krishna

Edited by Saji George Titus

GOVT PROPOSES TO LAUNCH KHELO INDIA MISSION FOR SPORTS SECTOR

==============================================================

The government will introduce 'Khelo India Mission' to boost the sports sector in the country over the next 10 years, Finance Minister Nirmala Sitharaman said in Parliament Sunday while presenting the Budget for 2026-27 (Apr-Mar). The mission is expected to focus on the development of sports infrastructure for training as well as competitions.

The government has announced an outlay of INR 9.24 billion for Khelo India Scheme for FY27, which is 32% higher from the allocation for FY26.

"The sports sector provides multiple means of employment, skilling and job opportunities. Taking forward the systematic nurturing of sports talent which is set in motion through the Khelo India programme, I propose to launch a Khelo India Mission to transform the sports sector over the next decade," Sitharaman said. The mission will facilitate an integrated talent development pathway, supported by training centres, and the systematic development of coaches and support staff. It will also focus on the integration of sports science and technology and on competitions and leagues to promote the sports culture. It will also focus on the development of sports infrastructure for training and competition.

The Khelo India Scheme aims to infuse sports culture in the country by allowing the population to derive benefits of sports. With the help of this scheme, the government is focusing on holistic development of children & youth, community development, gender equity, national integration and nation building, healthy lifestyle, national pride and economic opportunities related to sports development.

The finance minister also sees the country to have the potential to emerge as a global hub for high quality as well as afforable sports goods. "I propose a dedicated initiative for sports goods that will promote manufacturing, research and innovation in equipment design as well as material sciences," Sitharaman said.  

Reported by Shweta

Edited by Pankaj Aher

FY27 FISCAL DEFICIT PEGGED AT 4.3% OF GDP, FY26 AIM RETAINED AT 4.4%

====================================================================

The Union Budget has pegged the fiscal deficit target for 2026-27 (Apr-Mar) at 4.3% of gross domestic product, while the deficit for FY26 was retained at 4.4% GDP. The government's medium-term fiscal consolidation roadmap concluded in FY26, and the fiscal goalpost will now shift to targeting the Central government's debt-to-GDP ratio.

At 4.3% of GDP, the fiscal deficit for FY27 is slightly higher than expectations. According to an Informist poll, economists and market participants expected the FY27 fiscal deficit target to be 4.2% of GDP. 

In absolute terms, the fiscal deficit for FY27 is estimated at INR 16.958 trillion, up from the revised estimate of INR 15.585 trillion for the current financial year. The Budget for FY26 had projected the fiscal deficit at INR 15.689 trillion. Data released Friday showed the fiscal deficit in the first nine months of FY26 was INR 8.558 trillion, accounting for 54.9% of the revised estimate.

Finance Minister Nirmala Sitharaman had announced a medium-term fiscal consolidation roadmap in the FY22 Budget, under which the fiscal deficit was to be brought below 4.5% of GDP by FY26 from a record high of 9.2% of GDP in FY21 as tax revenues fell sharply and expenses rose due to the COVID-19 pandemic. The government's fiscal deficit was 4.8% of GDP in FY25.

The government has said that from FY27 onwards, it will endeavour to keep the fiscal deficit each year such that the Centre's debt will be on a declining path as a percentage of GDP. The central government debt is seen at 55.6% of GDP in FY27, down from 56.1% in FY26. The government aims to lower its debt to 50% of GDP, plus or minus 1%, by March 2031.  

A portion of outstanding liabilities on the public account of India is due to national small savings fund investments in special securities issued by state governments, which would be repaid by the states at maturity, according to Budget documents. If this liability is excluded, the adjusted central government debt is estimated at 55.1% of GDP at the end of FY27.

The government's primary deficit – fiscal deficit excluding interest payments – is seen at INR 2.92 trillion in FY27, up 2.7% from the revised Budget estimate for FY26. As a percentage of GDP, however, the primary deficit is expected to moderate to 0.7% next year from 0.8% in FY26.

The revenue deficit is projected at INR 5.923 trillion for FY27, 12.4% higher than the revised Budget estimate for FY26. As a percentage of GDP, the revenue deficit is seen at 1.5% next financial year, the same as FY26.

The Budget projected net tax collections in FY27 at INR 28.669 trillion, up 7.2% from the revised estimate of INR 26.747 trillion. Total receipts, excluding borrowing, are pegged at INR 36.515 trillion, up 7.2% from the revised estimate of INR 34.064 trillion in FY26. The total expenditure in FY27 is projected at INR 53.473 trillion, up 7.7% on year from the revised estimate of INR 49.648 trillion.

The following table details the government's balance sheet (in INR billion):

Reported by Shubham Rana

Edited by Saji George Titus

SAFE HARBOUR THRESHOLD FOR IT SVCS RAISED, APPROVAL TO BE AUTOMATED

===================================================================

The government has proposed the clubbing of group software development services, information technology-enabled services, knowledge process outsourcing, and contract research and development related to software development under a single category of 'Information Technology Services', with a common safe harbour margin of 15.5%, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday.

The Budget also proposed raising turnover threshold to avail the safe harbour scheme for IT services to INR 20 billion, from INR 300 million. This would help expand the number of eligible companies under the scheme. "Safe harbour for IT services shall be approved by an automated rule-driven process without any need for tax officer to examine and accept the application," Sitharaman said. "Once applied by an IT Services company, the same safe harbour can be continued for a period of 5 years at a stretch at its choice."

Further, in her Budget speech, Sitharaman said that for companies opting for certainty through advance pricing agreements, the government will fast-track unilateral APAs for IT services and try to conclude them within two years. "This timeline could be extended by six months at the taxpayer's request," she said. The facility to file modified returns, currently available to entities entering into an APA, will also be extended to their associated entities, as per FY27 Budget proposals.  

Reported by Sunil Raghu

Edited by Tanima Banerjee

TO EXTEND TIME FOR FINAL PDT EXPORTS TO 12 MOS FOR LEATHER GOODS

================================================================

The Union Budget has proposed to extend the time limit for the export of final products manufactured using inputs that were imported duty-free to one year from six months. This will apply to exports of leather and textile garments, leather or synthetic footwear, and other leather products.

The Budget also raised the limit for duty-free imports of specified inputs used in seafood processing for exports to 3% of the previous year's free on board export turnover, from 1% currently. "I also propose to allow duty-free imports of specified inputs, which is currently available for exports of leather or synthetic footwear, to exports of Shoe Uppers as well," Sitharaman said. 

Reported by – Gunjan Rajput 

Edited by Pankaj Aher

FY27 GROSS MKT BORROWING INR 17.20 TLN, NET BORROWING INR 11.73 TLN

===================================================================

The government will borrow INR 17.20 trillion through the sale of dated securities on a gross basis in 2026-27 (Apr-Mar), up from a revised estimate of INR 14.61 trillion in FY26. The revised estimate for the current fiscal year is adjusted lower from INR 14.82 trillion in the Budget estimate.

On a net basis, the government will sell bonds worth INR 11.73 trillion, which accounts for repayments worth INR 5.47 trillion, according to the Budget for FY27 presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday. The net issuance is higher than the revised estimate of INR 11.33 trillion and the budgeted INR 11.54 trillion for FY26. Net borrowing will fund 69.18% of the projected fiscal deficit of INR 16.96 trillion, or 4.3% of GDP, in FY27. The revised estimate for FY26 is retained at 4.4% of GDP, the same as the budget estimate.

The Budget receipts section showed that the government will not reduce its redemptions by tapping the Goods and Services Tax compensation fund. It has used INR 2.69 trillion from the GST compensation fund since FY24 to reduce its scheduled redemptions, including INR 675 billion in the FY26 Budget. The compensation cess will be discontinued from Sunday and any excess collections in the fund are likely to be distributed between the Centre and states.

According to an Informist poll of 30 economists, fund managers, and treasury heads, the government was seen targeting net issuance of dated securities at INR 11.60 trillion in FY27. The Centre was expected to announce a gross borrowing of INR 16.30 trillion through dated securities, according to the median of the poll.

The government has already completed a large part of its borrowing programme for FY26, with significant support from the Reserve Bank of India's gilt purchases through open market operations, including auctions and the secondary market, totalling around INR 7 trillion. It has borrowed INR 13.07 trillion through gilts so far this year, or 89.5% of the revised target. The RBI has rejected bids at the green bond and seven-year gilt auctions so far this financial year, likely leading to a downward revision in its borrowing target. There have been no devolvements of government bonds on underwriters since January 2025.

In the revised estimate for FY26, dated securities are set to finance 72.7% of the Centre's fiscal deficit through borrowing, but accounting for buybacks for FY27 bonds worth INR 867.75 billion, the borrowing will finance only 67.1% of the deficit. The Centre's cash drawdown in the next fiscal is projected at INR 327.02 billion from the revised estimate of INR 457.22 billion in FY26. The Budget estimate for cash drawdown was 24.84 billion in FY26.

Borrowing from small savings is pegged at INR 3.87 trillion in FY27, funding 22.8% of the fiscal deficit. The revised estimate for borrowing from small savings is INR 3.72 trillion, funding 23.9% of the deficit in FY26.

Net short-term borrowing through the issuance of 14-day, 91-day, 182-day, and 364-day Treasury bills is budgeted at INR 1.30 trillion for the next financial year, compared with nil net short-term borrowing in FY26. Both the FY26 Budget estimate and the FY26 revised estimate for net short-term borrowing were nil.

The Budget also provided for issuing up to INR 500 billion in cash management bills and borrowing up to INR 5.00 trillion from ways and means advances, though the net amount for both is nil.

The government has made no provision to buy back government bonds in FY27, though it has conducted such operations in the last two financial years. So far in FY26, the government has bought back around INR 867.75 billion of gilts maturing in FY27 through a series of auctions in June and July.

Meanwhile, the government aims to switch INR 2.50 trillion bonds in the next fiscal year, higher than the revised estimate of INR 1.64 trillion for FY26. A switch operation entails replacing a security maturing in the near term with a longer-maturity paper, effectively postponing the government's debt repayment. Analysts had estimated gilt switches for FY27 would be similar to the budgeted INR 2.50 trillion for FY26, which was met using switches and buybacks. 

The government bond market is shut Sunday, but gilt yields are expected to rise Monday after the gross borrowing figure for FY27 exceeded most market participants' expectations. The 10-year gilt yield was little changed Friday at 6.70%, near its highest level this fiscal year. It is seen rising to 6.75-6.80% Monday. However, traders are hoping the government will switch the RBI's holdings of bonds maturing in FY27, estimated at INR 700 billion to INR 950 billion, which could sharply bring down gross borrowing. 

The following are key details of the government's proposed borrowing programme. All amounts in INR billion.

Reported by Cassandra Carvalho and Aaryan Khanna

Edited by Saji George Titus

HIGHER ALLOCATION FOR VILLAGES, FARMERS TO HELP RURAL ECON: FARM MIN

====================================================================

The Union Budget emphasises structural reforms while significantly boosting allocations for villages, poor, and farmers, Shivraj Singh Chouhan, the minister of agriculture and farmers welfare, told reporters in a press conference post the Union Budget 2026-27 (Apr-Mar) presentation on Sunday.

The new SHE-Mart platform will empower rural women by offering a digital marketplace for their produce, Chouhan said. Self-Help Entrepreneur Marts, or SHE-Marts, will be set up as community-owned retail outlets within the cluster level federations through enhanced and innovative financing instruments, Finance Minister Nirmala Sitharaman said while presenting the Budget. The scheme, built on the success of the Lakhpati Didi Programme, will help women take the next step from credit-led livelihoods to being owners of enterprises, Sitharaman said.

Fertiliser subsidies are fully funded, while an integrated textiles programme and thrust on high-value crops like coconut and cashew aimed to enhance farmer incomes and drive holistic rural progress, Chouhan said.

In her Budget speech, Sitharaman announced that the government will have a pronounced emphasis on high-value crops such as coconut, sandalwood, cocoa and cashew to diversify farm outputs, increase productivity, enhance farmers' incomes, and create new employment opportunities. The finance minister also proposed an integrated programme for the labour-intensive textile sector, which includes the National Fibre Scheme, Textile Expansion and Employment Scheme, a National Handloom and Handicraft programme, Tex-Eco Initiative, and Samarth 2.0. 

"Rural spending has surged 21%, with Gram Swaraj Abhiyan receiving over INR 55,600 crores (INR 560 billion) directly from the Centre—exceeding INR 1,51,000 crores (INR 1.5 trillion) when including state contributions—targeting grassroots development," Chouhan said. 

Reported by Pallavi Singhal

Written by Shreya Shetty

Edited by Akul Nishant Akhoury

GOVT PROPOSES TO RESTRUCTURE PFC, REC UNDER NBFC REFORMS

========================================================

With an aim to achieve scale and efficiency in public sector non-banking financial companies, the government has proposed to restructure Power Finance Corp. Ltd. and REC Ltd., according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday. This comes at a time when both firms are an important part of the country's energy security and energy transition journey.

Administrated by the Ministry of Power, PFC is a key institution that finances projects related to the power sector and holds 20% market share. The Maharatna company is designated as a nodal agency for revamped distribution sector scheme and ultra mega power projects, and bid process coordinator for independent transmission projects, according to the company's website. 

REC, a Maharatna company under the administrative control of the Ministry of Power, finances power sector projects involved in generation, transmission, distribution, renewable energy, and new technologies. The state-owned company is the nodal agency for the revamped distribution sector scheme, as per the company's website. Recently, it has also diversified into the non-power infrastructure sector comprising roads and highways, metro rail, airports, ports, information technology communication. In 2019, PFC acquired 52.6% stake in REC and the convergence was to facilitate better financial aid to the power sector in India. 

At 1429 IST, shares of PFC were trading 1.5% higher at INR 385.05 on the National Stock Exchange and those of REC were 0.6% higher at INR 366.10. For the September quarter, PFC reported a net profit of INR 44.62 billion on a revenue of INR 147.56 billion. REC reported a net profit of INR 40.43 billion for the December quarter and the total income came in at INR 149.11 billion. 

Reported by Gopika Balasubramanium

Edited by Deepshikha Bhardwaj

TAX ON OUTWARD REMITTANCE FOR EDUCATION, MEDICAL TREATMENT CUT TO 2%

===================================================================

The Union Budget for 2026-27 (Apr-Mar) Sunday has reduced the tax collected at source on outward remittances for education and medical treatment to 2%. Earlier, under the liberalised remittance scheme, remittance of an amount or aggregate of amounts exceeding INR 1 million attracted a rate of 5% for tax collection at source. Remittances for purposes other than education and medical treatment will continue to attract a rate of 20%, Finance Minister Nirmala Sitharaman said while presenting the Budget in the Lok Sabha.

In addition, the government has reduced the rate for tax collected at source on sale of overseas tour programme packages from the current 5% and 20% to 2% without any stipulation of amount. The sale of "overseas tour programme package" includes expenses for travel, hotel stay or boarding and lodging, or similar expenditure.

The government has brought supply of manpower services within the ambit of payment to contractors for the purpose of tax deducted at source to avoid ambiguity. Thus, tax deducted at source on these services will be at the rate of 1% or 2% only, the government said.

The Budget has also brought a scheme for small taxpayers wherein a rule-based automated process will enable obtaining lower or nil deduction certificate instead of filing an application with the assessing officer. The payee will be given an online option that will ease the compliance burden on it and other small taxpayers, according to the Budget. 

In another relief for small taxpayers like students, young professionals, employees in the technology industry, and relocated non-resident Indians, the government has introduced a one-time six-month foreign asset disclosure scheme to disclose income or assets below a certain size. This scheme would be applicable in two categories--those who did not disclose their overseas income or assets and those who disclosed their overseas income and paid the tax due but did not declare assets acquired.

For the first category, the limit of undisclosed income or assets is proposed to be up to INR 10 million and they will need to pay 30% of the fair market value of assets or 30% of undisclosed income as tax and 30% as additional income tax in lieu of penalty. This payment will bring them immunity from prosecution. For those in the second category, who had disclosed their income, the asset value is proposed to be up to INR 50 million, the government said. Here, immunity from penalty and prosecution will be available with the payment of a fee of INR 100,000, it added. 

Reported by Surya Tripathi

Edited by Rajeev Pai

GOVT TO SET UP SELF-HELP ENTREPRENEUR MARTS TO SUPPORT WOMEN

============================================================

The government will set up Self-Help Entrepreneur marts to support women turn into owners of enterprises, Finance Minister Nirmala Sitharaman said while presenting the Union Budget for 2026-27 (Apr-Mar) in the Lok Sabha Sunday. The minister mentioned that the set up of 'SHE Marts' is the next step of Lakhpati Didi programme.

"Building on the success of the Lakhpati Didi Programme, I propose to help women take the next step from credit-led livelihoods to being owners of enterprises. Self-Help Entrepreneur Marts will be set up as community-owned retail outlets within the cluster level federations through enhanced and innovative financing instruments," Sitharaman said.

A 'Lakhpati Didi' is a self-help group member with an annual household income exceeding INR 100,000. The government's goal is to help the members of thse groups to become financially independent. 

Reported by J. Navya Sruthi

Edited by Pankaj Aher

GOVT TO DEVELOP 500 RESERVOIRS FOR FISHERIES; STRENGTHEN VALUE CHAIN

====================================================================

The government will undertake initiatives for the development of 500 reservoirs and 'Amrit Sarovars', and to strengthen the fisheries value chain in coastal areas, enabling market linkages involving start-ups and women-led groups together with Fish Farmers Producer Organisations, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday.

To support the country's fishermen to fully harness the economic value of marine resources beyond territorial waters, the government will not put any duty on fish catch by an Indian fishing vessel in Exclusive Economic Zones or on the high seas. Landing of such fish in foreign ports will be treated as export of goods, Sitharaman said. Safeguards will be also be put to prevent the misuse during the catching of fish, transit, and transshipment.

"A new section 56A is being inserted to provide special provisions for fishing and fishing related activities by an Indian-flagged fishing vessel beyond territorial waters of India. It also provides that fish harvested beyond the territorial waters of India may be brought into India free of duty and to treat fish that has landed at foreign port as export of goods in such manner as may be provided by rules," Sitharaman said.

The section also provides to make regulations to provide for the form and manner of making an entry in respect of fish harvested by an Indian-flagged fishing vessel including its declaration, custody, examination, assessment of duty, clearance, transit or transhipment. 

Reported by Ashutosh Pati

Edited by Vandana Hingorani

GOVT TO RAISE STT ON F&O; TAX BUYBACKS AS CAPITAL GAINS

=======================================================

The Union Budget for 2026-27 (Apr-Mar) raised the Securities Transaction Tax on futures transactions to 0.05% from 0.02% and that on options premium and exercise of options to 0.15% each from 0.1% and 0.125%, respectively. 

Finance Minister Sitharaman also proposed to tax buybacks for all types of shareholders as capital gains. The long-term capital gains tax rate in India is 12.5% and the short-term capital gains tax rate is 20%.

Sitharaman proposed an additional tax on buybacks for promotors to "disincentivize misuse of tax arbitrage". "This will make effective tax 22 percent for corporate promoters. For non-corporate promoters the effective tax will be 30 percent," Sitharaman said in her speech while presenting the Union Budget for 2026-27 (Apr-Mar). 

Reported by Anshul Choudhary

Edited by Pankaj Aher

TO EMPOWER DIFFERENTLY ABLED CITIZENS VIA LIVELIHOOD TRAINING

=============================================================

The government plans to provide livelihood oppurtunities and empower differently abled citizens via the Divyangjan Kaushal Yojana, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday. "We will ensure dignified livelihood opportunities through industry-relevant and customised training specific to each divyang group," Sitharaman said.

She said sectors like information technology, animation, visual effects, gaming, comics, hospitality, and food and beverages offer task-oriented and process-driven roles, which are suitable for differently abled citizens.

The government also proposed to scale up production of assistive devices, invest in research and development and AI integration by way of support to the Artificial Limbs Manufacturing Corp. of India, Sitharaman said. It also plans to strengthen Pradhan Mantri Divyasha Kendras and support setting up of assistive technology marts as modern retail-style centres where differently abled citizens and senior citizens can see, try and purchase assistive products.

Reported by Kabir Sharma

Edited by Deepshikha Bhardwaj

NO INCOME TAX, TDS ON INTEREST ON CLAIMS BY MOTOR ACCIDENT TRIBUNAL

===================================================================

There will be no income tax and tax deducted at source on the interest awarded by the Motor Accident Claims Tribunal for the claims of a natural person, Finance Minister Nirmala Sitharaman announced in the Budget for 2026-27 (Apr-Mar). This step is taken to alleviate the suffering of victims of motor vehicle accidents and their families, Sitharaman said. 

Under the Motor Vehicles Act, 1988, the insurer is liable to pay compensation in the event of death or permanent disablement of a motor vehicle. The Motor Accident Claims Tribunal is established to adjudicate claims for compensation arising from motor accidents. 

In certain cases, the claims given by the tribunal may involve delay due to the filing of a compensation claim, investigation, adjudication of the claim and various other factors. For this, a provision exists in the 1988 Act to compensate the injured or their legal heirs for the delay in payment of compensation. This provision states that a simple interest shall also be paid on the claims given to the person. 

The courts in India have taken different interpretations on whether these interests should be taxable. The Allahabad High Court, the Himachal Pradesh High Court, and the Punjab and Haryana High Court have held that these payments are not income and that no tax is deductible at source. However, the Patna High Court and the Madras High Court have held that such payments are deductible at source. The announcement made in the Budget has brought clarity to the law and relief to accident victims. 

Reported by Surya Tripathi

Edited by Saji George Titus

FY27 RAILWAY CAPEX SEEN AT INR 2.93 TLN, UP NEARLY 11% FROM FY26

================================================================

The Union Budget projected the capital expenditure of the Indian Railways in 2026-27 (Apr-Mar) at INR 2.93 trillion, up from the revised estimate of INR 2.65 trillion for the current fiscal year. The Budget for FY26 had projected the capital outlay of the Indian Railways at INR 2.65 trillion.

Of the planned capital expenditure for FY26, INR 2.81 trillion will come from budgetary support and INR 120 billion from extra budgetary resources, including public-private partnerships. 

In FY27, Indian Railways will spend INR 654.97 billion on procuring rolling stock, up from INR 633.73 billion per the revised estiamte for FY26. The railways will spend INR 367.22 billion on new line construction, up 20% from INR 306.32 billion to be spent in the current financial year as per the revised estimates. The national transporter will spend another INR 377.50 billion on doubling tracks, up 30% from INR 290.96 billion to be spent in FY26 according to the revised estimates. 

Indian Railways' gross traffic receipts for FY27 are estimated at INR 3.02 trillion, up from the revised estimate of INR 2.78 trillion for this year. Out of this, freight revenue for the next financial year is pegged at INR 1.89 trillion, up from INR 1.78 trillion revised estimate for FY26. Passenger receipts for FY27 are projected at INR 873 billion, up from INR 800 billion which is the revised estimate for FY26. 

Reported by Krity Ambey and Suryash Kumar

Edited by Pankaj Aher 

FY27 GROSS TAX MOP-UP PEGGED AT INR 44.04 TLN, UP 8.0% ON YEAR

==============================================================

The Budget for 2026-27 (Apr-Mar), presented by Finance Minister Nirmala Sitharaman on Sunday, projected the gross tax collections at INR 44.04 trillion, up 8.0% from the revised estimate of INR 40.78 trillion for FY26. The revised estimate for FY26 is INR 1.92 trillion lower than the Budget estimate of INR 42.70 trillion. The revised estimate shows tax collections growing at 7.4% on year in FY26 compared with the Budget estimate of 12.5%.

Of the total tax collections in FY27, the government aims to collect INR 26.97 trillion from direct taxes and INR 17.07 trillion from indirect taxes.

The sharply lower tax collections in FY26 are owing to the government's dual tax bonanza during the year. In the Budget last year, Sitharaman raised the tax rebate limit to INR 1.2 million, effectively meaning that individuals with income of up to INR 1.2 million per year do not have to pay any income tax, resulting in a revenue loss of INR 1 trillion per year, Sitharaman had said in the Budget.

The government also lowered the target for goods and services tax collection due to the second tax benefit announced in the year. In September, the GST Council overhauled the indirect tax structure, merging the four slabs of 5%, 12%, 18%, and 28% into two slabs of 5% and 18% from Sept. 22. A host of white goods, especially consumer durables such as washing machines and big televisions, were moved to the 18% slab from 28%, thereby lowering the average GST rate on these as well. The government has estimated it will lose INR 420 billion annually due to these cuts to the GST structure and rates.

The government's total tax collections in Apr-Dec rose 8.5% on year to INR 29.84 trillion.

The government's net tax collections after devolution to states and transfer to the National Calamity Contingent Duty to the National Disaster Response Fund are pegged at INR 28.67 trillion in FY27, up 7.2% on year. The 16th Finance Commission, whose report was tabled on Sunday, retained devolution of 41% of tax collected to states as their share, which is similar to the 41% recommended by the previous 15th Finance Commission. The actual transfer to states will be only 34.7% of gross tax collection in FY27, due to increased reliance on surcharges and cesses. Surcharges and cesses are not devolved to the states.

The 16th Finance Commission recommended the formula for states' share of central taxes and grants-in-aid for five years starting FY27.

The following table details the government's tax collection targets as per the Budget proposals (in INR billion):

Reported by Priyasmita Dutta and Gunjan Rajput 

Edited by Saji George Titus

X BUZZ - WHO SAID WHAT ON SITHARAMAN'S SPEECH

=============================================

POLITICIANS
===========

> "The Union Budget reflects the aspirations of 140 crore Indians. It strengthens the reform journey and charts a clear roadmap for Viksit Bharat.

#ViksitBharatBudget"

  – Narendra Modi, Prime Minister. @narendramodi

> "Under the visionary leadership of PM Shri @narendramodi, India's journey towards a Viksit Bharat continues to gather momentum. In this spirit, I congratulate Finance Minister Smt. @nsitharaman, for presenting a budget that seeks to "transform aspiration into achievement" and "potential into performance". This "Yuva Shakti–driven Budget" will further strengthen PM Modi's vision of an Aatmanirbhar and Viksit Bharat."

  – Rajnath Singh, Union defence minister. @rajnathsingh

> "#UnionBudget2026 outlines a decisive roadmap centred on farmers, youth, and MSMEs, strengthening the foundations of inclusive growth, innovation, and capital investment as India progresses towards #ViksitBharat2047. I extend my sincere thanks to Prime Minister Shri @narendramodi Ji and Finance Minister Smt. @nsitharaman Ji for a fiscal strategy that advances productivity, competitiveness, and entrepreneurship, positioning India as a global manufacturing and innovation leader. #ViksitBharatBudget"

  – Nitin Gadkari, Union road transport and highways minister. @nitin_gadkari

> "#ViksitBharatBudget embodies Bharat as a nation forging its new identity as an emerging economic power center with resolute trust in its own strengths.

Post covid, PM @narendramodi Ji's visionary economic policies have fuelled the Indian economy. #ViksitBharatBudget turbocharges the momentum to bolster India's position on the global stage as the most attractive investment destination for a wide range of sectors, from traditional to the new-age ones."

   – Amit Shah, Union home minister. @AmitShah

> "Modi Govt has run out of ideas. #Budget2026 does not provide a single solution to India's many economic, social, and political challenges. 

"Mission Mode" is now "Challenge Route."

"Reform Express" rarely stops at any "Reform" Junction.

Net result: NO policy vision, NO political will."

  – Mallikarjun Kharge, Congress president.@kharge

> "While the documents need to be studied in detail, it is clear after 90 mins that Budget 2026/27 falls woefully short of the hype that was generated about it. It was totally lacklustre. The speech was also non-transparent since it gave no idea whatsoever of budgetary allocations for key programmes and schemes."

  – Jairam Ramesh, Congress general secretary. @Jairam_Ramesh

> "God bless & protect @nsitharaman
What a comprehensive and widespread #Unionbudget so far. 
Truly inclusive all sections and geographies.
Challenge is we ALL read and study and apply with integrity and sincerity. 
Enough money provided. 
Now to be spent with care and appropriateness."

  – Kiran Bedi, former Puducherry lieutenant governor. @thekiranbedi

> "Bengaluru is set to benefit tremendously with the development of 7 High Speed Railway (HSR) Corridors by Shri @NarendraModi Ji Govt. High-speed connectivity with Hyderabad and Chennai will enable faster movement of people and goods, facilitate smoother trade flows, strengthen regional economic integration and unlock new growth opportunities for the city. This is a major step towards building a future-ready transport network that supports growth, mobility and economic efficiency. @nsitaraman

#ViksitBharatBudget"

  – Tejasvi Surya, BJP Yuva national president. @Tejasvi_Surya

> "I am relieved to see Nirmala ji present the Union Budget
At the rate at which we are going, I was scared if Trump or one of his minions would do so
After all Trump is taking all the decisions - including where will we buy oil from! Mr Modi has outsourced governance to the US"

  – Supriya Shrinate, Congress spokesperson. @SupriyaShrinate

> "Markets wobble not because India is weak, but because uncertainty thrives where vision is absent. A forward-looking budget must empower job creators, not just headline-chase. #Budget2026"

  – Abhishek Singhvi, Congress leader. @DrAMSinghvi

JOURNALISTS
===========

> "‘Skilling' the new buzzword in union budget 2026 speech so far . Good . But as a recent CAG report on skill development exposed , skilling needs to translate from intent to tangible outcomes. #BudgetOnIndiaToday."

  – Rajdeep Sardesai, India Today consulting editor. @sardesairajdeep

> "A sharp 22% jump in the capital outlay for defence to 2.19 lakh crore rupees in the budget. That was only to be expected given the horrible geopolitical situation, and the tough neighbourhood India lives in. This should help pay for all those deals we are expecting to be announced soon."

  – Vikram Chandra, founder, Editorji Technologies. @vikramchandra

> "The FM's speech was generally lacklustre. Even table thumping by treasury benches was lacklustre. Most schemes sounded like rehash of past budget speeches. No real announcements to deal with the massive global trade/ investment headwinds which economic survey warns about."

  – M.K. Venu, founding editor, The Wire. @mkvenu1

> "Over 90% of traders lose money say @SEBI_updates studies in the last few years. Now govt will collect higher STT- while you lose!! STT has steadily risen and defeated the original premise of ease of collection! Exactly likes cess on fuel."

  – Sucheta Dalal, managing director at MoneyLife magazine. @suchetadalal

OTHERS

=======

> "By placing biopharma among the seven strategic frontier sectors and launching Biopharma Shakti with an outlay of 10,000 crore over five years, the Union #Budget makes a decisive investment in India's health and innovation future. As India's disease burden shifts toward cancer, diabetes and autoimmune disorders, biologics and biosimilars will be central to improving longevity and quality of life. This initiative—spanning manufacturing scale-up, global-grade regulation, new NIPER institutions and a nationwide clinical trials network—can firmly position India as a global biopharma manufacturing hub."

   – Kiran Mazumdar-Shaw, Biocon executive chairman. @kiranshaw

 > "I don't really care about the #STT increase which was obviously avoidable. Also there was no need for such a long winding speech. Overall next year projections seem reasonable. Capital Expenditure increase of 10% is realistic. Buyback taxation reduction is a good positive will lead to many buybacks from undervalued companies. Many custom simplifications as well as cut in Customs on baggage to 10% is positive.

Overall neutral budget. Something should have been done to attract foreign capital however this random #Atmanirbharat thought process and disregard for foreign capital seems to be too built up into the Governments DNA. Results season is progressing"

   – Sandip Sabharwal, former head of equity-SBI Mutual Fund. @sandipsabharwal

> "This is a government big on ideas & vague on specifics : for eg the BIG IDEA in #Budget2026 on Rare Earths! The #BudgetSession2026 may announce a Rare Earth Corridor but if we don't have a single window clearance on mining & environmental clearances what use is this corridor?
#NirmalaSitharaman ji #nirmala ji #Budget"

  – Tehseen Poonawalla, political analyst. @tehseenp

> "Budget first take. 
A budget for the real economy. Welcome increase in defence spend. Broad fiscal discipline continues. Works on balancing between financialisation of the economy, and focused development of diverse, deep India long term."

   – Uday Kotak, Kotak Mahindra Bank founder and director. @udaykotak

> "This budget reminded of my rebuke on Shark Tank to one of the pitchers: "Bilkul time waste kiya aapne - apna bhi aur humara bhi !"

  – Ashneer Grover, BharatPe founder. @Ashneer_Grover

> "STT is raised only on F&O. NOT in cash segment. STT raise is different in futures market from options market. Clearly, government is trying to make up tax exemptions and reductions in other sectors from stock market participants and quietly nudging low ticket investors to invest in cash market."

  – Amit Kumar Gupta, Fintrekk founder. @amitgupta0310

Compiled by Tanima Banerjee

Filed by Vandana Hingorani 

GOVT TO SET UP HIGH LEVEL COMMITTEE ON BANKING FOR VIKSIT BHARAT

================================================================

The government proposed setting up a "high level committee on banking for Viksit Bharat" to comprehensively review India's banking sector and align it with the country's growth goals while safeguarding financial stability, inclusion and consumer protection, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday.

"The Indian banking sector today is characterised by strong balance sheets, historic highs in profitability, improved asset quality and coverage exceeding 98% of villages in the country," Sitharaman said. "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."

Further, in her Budget speech, she proposed a comprehensive review of the Foreign Exchange Management (non-debt instruments) rules "to create a more contemporary, user-friendly framework for foreign investments, consistent with India's evolving economic priorities." 

Reported by Vaishali Tyagi

Edited by Deepshikha Bhardwaj

GOVT TO SET UP SINGLE DIGITAL WINDOW BY END FY27 FOR CARGO CLEARANCE

====================================================================

The government aims to set up a single digital window by the end of the next financial year for seamless cargo clearance from various government agencies, Finance Minister Nirmala Sitharaman said in Parliament Sunday while presenting the Budget for 2026-27 (Apr-Mar). The minister proposed several other measures related to customs and cargo clearance to promote ease of doing. 

"Processes involved in clearance of food, drugs, plant, animal & wildlife products, accounting for around 70% of interdicted cargo, will be operationalised on this system by April 2026 itself," Sitharaman said. "For goods not having any compliance requirement, clearance will be done by Customs (Department) immediately after online registration is completed by the importer, subject to the payment of duty."

In the next two years, the government aims to have a single, integrated and scalable platform for all customs processes, called Customs Integrated System. The minister suggested government agencies leverage Authorised Economic Operators accreditation for preferential treatment in clearing their cargo. 

"The Customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit," Sitharaman said. "These reforms will move away from the current system of officer-dependent approvals, and reduce transaction delays and compliance costs."

To encourage trust-based systems, the government aims to minimise the cargo verification process for regular importers with longstanding supply chains. "Export cargo using electronic sealing will be provided through clearance from the factory premises to the ship," the finance minister said. 

Sitharaman also proposed a Coastal Cargo Promotion Scheme to incentivise a modal shift from rail and road, to increase the share of inland waterways and coastal shipping from 6% to 12% by 2047. She also proposed operationalising 20 new National Waterways over the next 5 years, and establishing new dedicated freight corridors connecting Dankuni in the east, to Surat in the west. 

Reported by Krity Ambey

Edited by Vandana Hingorani

GOVT TO SET UP SINGLE DIGITAL WINDOW BY END FY27 FOR CARGO CLEARANCE

====================================================================

The government aims to set up a single digital window by the end of the next financial year for seamless cargo clearance from various government agencies, Finance Minister Nirmala Sitharaman said in Parliament Sunday while presenting the Budget for 2026-27 (Apr-Mar). The minister proposed several other measures related to customs and cargo clearance to promote ease of doing. 

"Processes involved in clearance of food, drugs, plant, animal & wildlife products, accounting for around 70% of interdicted cargo, will be operationalised on this system by April 2026 itself," Sitharaman said. "For goods not having any compliance requirement, clearance will be done by Customs (Department) immediately after online registration is completed by the importer, subject to the payment of duty."

In the next two years, the government aims to have a single, integrated and scalable platform for all customs processes, called Customs Integrated System. The minister suggested government agencies leverage Authorised Economic Operators accreditation for preferential treatment in clearing their cargo. 

"The Customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking and risk-based audit," Sitharaman said. "These reforms will move away from the current system of officer-dependent approvals, and reduce transaction delays and compliance costs."

To encourage trust-based systems, the government aims to minimise the cargo verification process for regular importers with longstanding supply chains. "Export cargo using electronic sealing will be provided through clearance from the factory premises to the ship," the finance minister said. 

Sitharaman also proposed a Coastal Cargo Promotion Scheme to incentivise a modal shift from rail and road, to increase the share of inland waterways and coastal shipping from 6% to 12% by 2047. She also proposed operationalising 20 new National Waterways over the next 5 years, and establishing new dedicated freight corridors connecting Dankuni in the east, to Surat in the west. 

Reported by Krity Ambey

Edited by Vandana Hingorani

NET SHORT-TERM BORROWING SEEN AT INR 1.3 TLN IN FY27 VS NIL IN FY26

===================================================================

The Union Budget has projected a net short-term borrowing of INR 1.30 trillion for 2026-27 (Apr-Mar), compared with nil in the current year. The Budget for 2025-26 had projected nil receipts from net short-term borrowings. The net issuance comes from Treasury bills.

The government pegged the net issuance of 91-day T-bills in FY27 at INR 228.00 billion, 182-day T-bills at INR 237.96 billion and 364-day T-bills at INR 558.01 billion. It has not estimated any net borrowing from the Ways and Means Advances and cash management bills to fund the fiscal deficit in FY26.

Interestingly, the Budget has estimated net issuance of INR 276.02 billion from 14-day T-bills. 14-day intermediate T-bills are non-marketable and state governments typically invest in them.

Typically, the government has a large net short-term borrowing through T-bills in the Apr-Jun quarter, before running that down in the remainder of the financial year. In the current fiscal, government's net borrowing has increased in the March quarter after running a negative net issuance until December-end.

The following are key details of the net borrowing through T-bills. All amounts in INR billion:

Reported by Janwee Prajapati and Aaryan Khanna

Edited by Saji George Titus

FY27 INTEREST-FREE CAPEX LOANS TO STATES INR 1.85 TLN, UP 28% ON YR

===================================================================

The Union Budget for 2026-27 (Apr-Mar) has estiamted interest-free loans for capital expenditureto to states at INR 1.85 trillion in 2026-27 (Apr-Mar), up over 28% from the revised estimate of INR 1.44 trillion in FY26. The Budget for FY26 had projected the interest-free loans at INR 1.50 trillion. 

Under the capital expenditure loan scheme, the Centre provides 50-year interest-free loans to states for capital expenditure. The Centre has been progressively increasing the outlay for this scheme since its first announcement in FY22.  

Reported by Krity Ambey and Suryash Kumar

Edited by Pankaj Aher

FY27 TELECOM RECEIPTS SEEN AT INR 1.17 TLN, DN 34% FROM FY26

============================================================

The Union Budget for 2026-27 (Apr-Mar) has projected the government's receipts from the telecom sector at INR 1.17 trillion, down 34% from the revised estimate of INR 1.78 tillion for FY26. The Budget for FY26 had projected telecom receipts, mainly consisting of licence fees and spectrum usage charges from telecom operators, at INR 824.43 billion.

The licence fee is levied at 8% of the adjusted gross revenue of telecom companies and makes up 14-17% of the total expenditure of telecom companies such as Bharti Airtel Ltd. and Vodafone Idea Ltd. The government has not conducted any spectrum auction in the current financial year. 

Reported by Krity Ambey and Astha Oriel

Edited by Pankaj Aher

FY27 SUBSIDY BILL SEEN AT INR 4.55 TLN, DOWN 3.14% ON YEAR

===========================================================

The government has pegged its total subsidy bill for 2026-27 (Apr-Mar) at INR 4.55 trillion, down 3.14% on year from the revised estimate of INR 4.70 trillion for the current fiscal year. The budget estimate for the subsidy bill for FY26 was INR 4.26 trillion. 

The government aims to spend INR 1.71 trillion on fertiliser subsidies next year. The revised estimate for the fertiliser subsidy bill is INR 1.86 trillion, up 11% from the Budget estimate of INR 1.68 trillion for FY26. The government has pegged its food subsidy bill for FY27 at INR 2.28 trillion. It has also revised the food subsidy bill for FY26 to INR 2.28 trillion from the budget estimate of INR 2.03 trillion. 

The government's major subsidies include food, fertilisers, and petroleum products. For FY27, the government has estimated the petroleum subsidy bill at INR 1.21 trillion, against the revised estimate of INR 1.51 trillion for the current year.

The following table details government subsidies, in INR billion, as per the Budget proposals:

End

Reported by Krity Ambey and Astha Oriel

Edited by Pankaj Aher

FY27 OUTLAY UNDER VB-G Ram G PEGGED INR 956.92 BLN, UP 8.7% YOY

===============================================================

The Union Budget for 2026-27 (Apr-Mar) has proposed an allocation of INR 956.92 billion for the new rural employment scheme, Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), higher than the revised estimate of INR 880 billion allocated for the erstwhile Mahatma Gandhi National Rural Employment Guarantee Act in FY26.

The Budget has also proposed allocation of INR 300 billion for the MGNREGA programme component for FY27.

The new scheme, legislated under the VB-G RAM G Act, 2025, replaced the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, in December and raised the guaranteed employment to 125 days from 100 days under the MGNREGA.

The Act will be implemented as a centrally-sponsored scheme and operationalised by state governments, with a cost-sharing pattern of 60:40, 90:10 for north-eastern and Himalayan states, and 100% central funding for Union Territories without legislatures. 

The Act has drawn strong criticism from Opposition parties over changes in funding patterns and the omission of Mahatma Gandhi from the name of the rural employment scheme.  

Reported by Afra Abubacker and Ashutosh Pati

Edited by Avishek Dutta

GOVT TO SWITCH INR 2.5 TLN OF GILTS FY27 VS INR 1.64 TLN FY26

==============================================================

The government aims to conduct gilt switches worth a record INR 2.50 trillion in the next fiscal year starting April, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday. A switch operation entails replacing a security maturing in the near term with a longer-maturity paper, effectively delaying the government's debt repayment.

The revised estimate shows the government aims to switch gilts worth INR 1.64 trillion in FY26, against the Budget estimate of INR 2.50 trillion. The government has switched short-term bonds worth INR 1.27 trillion through auctions to market participants in Apr-Dec. It also conducted a bilateral switch of two bonds worth INR 373 billion maturing in FY27 with the Reserve Bank of India in May, bringing the total amount to INR 1.64 trillion.

Informist had reported that the government would not conduct any more switch auctions in the current fiscal, having met its full-year target through a combination of gilt switches and buybacks. The government bought back INR 867.75 billion worth of FY27 bonds through auctions in June and July. Its revised estimate for buybacks is INR 867.75 billion and it has not budgeted for buybacks in FY27. The government has kept its budget estimate for buybacks at nil in FY25 and FY26, but bought back over INR 860 billion of bonds in both years.

Analysts had expected the government's Budget estimate for switches to be similar to the current financial year.  

Reported by Aaryan Khanna and J. Navya Sruthi

Edited by Saji George Titus

GOVT PROPOSES INR 1 BLN INCENTIVE FOR SINGLE MUNICIPAL BOND ISSUANCE

====================================================================

The government has proposed an incentive of INR 1 billion for single municipal bond issuances of over INR 10 billion, while smaller and medium funds of up to INR 2 billion will continue to be supported under the Atal Mission for Rejuvenation and Urban Transformation scheme, according to the Union Budget for 2026-27 (Apr-Mar) presented by Finance Minister Nirmala Sitharaman in the Lok Sabha Sunday.

The Atal Mission for Rejuvenation and Urban Transformation, or AMRUT, scheme provides support to urban local bodies for raising funds through municipal bonds, aiming to make cities self-reliant, financially sustainable, and capable of upgrading infrastructure. 

"To encourage the issuance of municipal bonds of higher value by large cities, I propose an incentive of Rs. 100 crore (INR 100 billion) for a single bond issuance of more than Rs. 1000 crore (INR 10 billion)", Sitharaman said. "The current scheme under AMRUT which incentivises issuances up to Rs. 200 crore (INR 2 billion) will also continue to support smaller and medium towns."

To develop the corporate bond market, the government plans to introduce a market-making framework with suitable access to funds and derivatives on corporate bond indices, as well as total return swaps on corporate bonds. 

Reported by Vaishali Tyagi

Edited by Deepshikha Bhardwaj

FY27 DEBT-TO-GDP SEEN AT 55.6% OF GDP AGAINST 56.1% OF GDP FOR FY26

====================================================================

The Union Budget has estimated the debt-to-GDP ratio at 55.6% of GDP for 2026-27 (Apr-Mar), 50 basis points lower than the estimate of 56.1% of GDP for FY26. FY27 will be the first year of the government move to target debt as percentage of GDP as the main parameter to track fiscal consolidation, instead of fiscal deficit. The government is looking to cut its debt-to-GDP ratio to 50% by March 2031, with a band of 100 bps on either side to provide some flexibility.

The target for FY27 is higher than what market participants had expected. According to an Informist poll, economists and market participants had expected the government to target a debt-to-GDP ratio of 55.1% for FY27. "A declining debt-to-GDP ratio will gradually free up resources for priority sector expenditure by reducing the outgo on interest payments," Finance Minister Nirmala Sitharaman said while presenting the Union Budget for FY27 Sunday. 

A portion of outstanding liabilities on the public account of India is on account of national small savings fund investments in special securities issued by state governments which would be repaid by the states at the time of maturity, according to Budget documents. If this liability is excluded, the adjusted central government debt is estimated at 55.1% of GDP at the end of FY27. The Budget pegged the fiscal deficit target for FY27 at 4.3% of GDP. The revised estimate for the fiscal deficit for FY26 was unchanged from the budget estimate at 4.4% GDP even though the revised estimate deficit amount was slightly lower in absolute terms from the budget estimate.  

Reported by Pratiksha

Edited by Pankaj Aher

TO BORROW INR 3.87 TLN FROM SMALL SAVINGS IN FY27, UP 4% ON YEAR

=================================================================

The government aims to borrow INR 3.87 trillion on a net basis from the National Small Savings Fund in 2026-27 (Apr-Mar) to part-finance its fiscal deficit, up 3.9% from the revised estimate of INR 3.72 trillion for the current financial year. The borrowing from small savings will account for 22.8% of the government's projected fiscal deficit of INR 16.96 trillion in the next fiscal year.

According to the revised estimate, net borrowing from small savings will account for 23.9% of the fiscal deficit for FY26. The FY26 Budget had originally estimated the borrowing from small savings at INR 3.43 trillion.

The net collections from government-run small savings schemes are likely to rise by 5.0% to INR 3.59 trillion in FY27, from the revised estimate of INR 3.42 trillion for the current year. The government had earlier pegged the net collections in the schemes in FY26 at INR 3.06 trillion. 

The following are key details of borrowing from and collections of the National Small Savings Fund, in INR billion:

Reported by Krity Ambey 

Edited by Saji George Titus

FY27 nominal GDP growth pegged at 10.0% vs 8.0% estimated for FY26

====================================================================

The Union Budget has projected a nominal GDP growth of 10.0% for the next financial year starting April, higher than the 8.0% projected for FY26 in the government's first advance estimate.

The Budget for FY26 had assumed a nominal GDP growth of 10.1%. The government's nominal GDP growth projection for FY27 is marginally below expectations. According to an Informist poll, the Budget was expected to assume a nominal GDP growth of 10.1% for FY27.

Nominal GDP growth is expected to rise next financial year, driven by higher inflation. In FY26, nominal GDP growth slowed to a five-year low of 8.0% from 9.8% the previous year, driven by record-low inflation.

CPI inflation averaged 1.7% in the first nine months of FY26, down from 4.6% in FY25, while WPI inflation averaged 0.1% during the same period, compared with 2.3% in FY25. As a result, the GDP deflator – which measures changes in the value of goods and services produced in the economy – is estimated to have fallen to a record low of 0.5% in FY26. Economists expect inflation to rise in FY27 due to higher food prices and unfavourable base effects. The Reserve Bank of India has projected CPI inflation at 3.9-4.0% in the first half of FY27.

Real GDP growth is expected to be robust in FY27, even if slightly lower than the current year. The Economic Survey for FY26, released Thursday, projected FY27 real GDP growth of 6.8%-7.2%, compared with the 7.4% growth estimated for FY26 by the government's first advance estimate.

The nominal GDP assumed in the Budget is crucial, as it will determine key targets, including fiscal deficit and tax collections.  The statistics ministry is set to release new CPI and GDP series in February, which could affect both official economic projections and the Budget's underlying calculations.  

Reported by Shubham Rana and Divya Moolayattil

Edited by Saji George Titus

GOVT TO RAISE INR 800 BLN VIA DIVESTMENT, ASSET MONETISATION IN FY27

====================================================================

The government aims to raise INR 800 billion as miscellaneous capital receipts through the divestment of its stake in public sector undertakings and asset monetisation in 2026-27 (Apr-Mar), up sharply from the revised estimate of INR 338.37 billion for the current fiscal year, accoridng to the budget. The Budget for FY26 had projected the receipts from divestment and asset monetisation at INR 470 billion. 

So far in FY26, the government has raised INR 87.68 billion by offloading minor stakes in Mazagon Dock Shipbuilders Ltd., Bank of Maharashtra, Indian Overseas Bank, and remittance from Specified Undertaking of the Unit Trust of India. In FY25, the government had raised INR 172.02 billion from such miscellaneous capital receipts against the target of INR 330 billion.

The government has been classifying revenue from divestment and asset monetisation as miscellaneous capital receipts since the Interim Budget of FY25. It discontinued the practice of giving a specific target for divestment receipts in the Interim Budget for FY25. The government had said keeping a fixed divestment target was difficult due to market volatility. Prior to FY24, the government had met its divestment target in only two out of the previous 10 years.  

Reported by Krity Ambey and Suryash Kumar

Edited by Pankaj Aher

TO SPEND 20 PAISE OF EVERY RUPEE EARNED ON INTEREST PAYMENTS

============================================================

The Indian government will spend 20 paise of every rupee it earns in 2026-27 (Apr-Mar) to pay interest on its past borrowings.

According to the Budget for FY27 presented in the Lok Sabha by Finance Minister Nirmala Sitharaman on Sunday, the government will spend 2 paise of every rupee earned on pensions and 06 paise on major subsidies.

The following table details where the rupee comes from and where it is spent.

RUPEE EARNED

RUPEE SPENT

Reported by Shubham Rana and Divya Moolayattil

Edited by Saji George Titus

FINANCE MINISTER SITHARAMAN BEGINS SPEECH IN LOK SABHA

======================================================

Finance Minister Nirmala Sitharaman has started presenting the Union Budget for 2026-27 (Apr-Mar) in the Lok Sabha. 

Sitharaman is presenting her ninth Budget at a time of heightened global uncertainty sparked by the trade policies of the US and geopolitical conflicts.

The Budget is expected to continue to focus on fiscal consolidation, albeit at a slower pace. According to an Informist poll, the government is likely to set a fiscal deficit target of 4.2% of GDP for FY27 compared to the current year's target of 4.4% of GDP.

Economists expect the government to meet its fiscal deficit target for FY26, which would mark the end of the Centre's medium-term fiscal consolidation road map announced in the FY22 Budget. Under the road map, the government had to bring down its fiscal deficit below 4.5% of GDP by FY26.

From FY27, the government will shift its focus to targeting the debt-to-GDP ratio instead of the fiscal deficit. The government is expected to target a debt-to-GDP ratio of 55.1% in the FY27 Budget, according to an Informist Poll, one percentage point lower than the 56.1% projected for FY26.

The government last year announced it is looking to cut its debt-to-GDP ratio to 50% by March 2031, with a band of 100 basis points on either side providing some flexibility. The ratio, estimated at 57.1% in FY25, will need to be reduced by 122 bps on average every year if the mid-point of the 49-51% range is to be met by FY31. 

Sitharaman is also expected to announce steps to boost economic growth in the country in the medium-to-long run. The Economic Survey, presented on Thursday, pegged GDP growth for FY27 at 6.8-7.2%, lower than the 7.4% growth estimated for FY26 in the government's first advance estimate.

The Economic Survey also said that India's medium-term growth potential has risen to around 7% from 6.5% projected three years ago. India's medium-term growth potential could rise over 7.5%, and closer to 8%, if the government undertakes more structural reforms and deregulation exercises, Chief Economic Adviser to the government V. Anantha Nageswaran said Thursday.

The government will likely continue its focus on capital expenditure, although the pace of growth may moderate, economists have said. The Budget is also seen announcing measures focusing on ease of doing business such as simplification of the customs duty structure.  End

Reported by Shubham Rana 

Edited by Vandana Hingorani

End

US$1 = INR 91.98

Compiled by Mansi Patil and Shaheed Shaikh
Filed by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.co

© Informist Media Pvt. Ltd. 2026. All rights reserved.