In her ninth consecutive Union Budget presentation, Finance Minister Nirmala Sitharaman unveiled the fiscal roadmap for India, outlining key measures impacting prices, taxation, and sectoral growth. The budget, presented on a rare Sunday, has generated considerable interest, especially after last year's significant tax relief measures.

Focus on 'Make in India'

The government is expected to strongly push its 'Make in India' agenda, taking steps to increase consumers' purchasing power. To that end, the budget includes proposals to boost domestic manufacturing through tax certainty, incentives, and simplified compliance.

What's Getting Cheaper?

Several items and services are expected to become more affordable, offering relief to the common citizen.

• Smartphones and Tablets: Customs duties on components like camera modules and display panels may be reduced, potentially lowering the prices of domestically assembled smartphones and tablets.
• Affordable Housing: There is anticipation that the tax deduction limit on home loan interest will increase from Rs 2 lakh to Rs 5 lakh, reducing the financial burden on middle-class homebuyers and encouraging property investment.
• Health Insurance: Extending Section 80D-like benefits to the new tax regime could allow deductions between Rs 25,000 and Rs 50,000 on health insurance premiums, easing the financial strain of medical coverage.
• Electric Vehicles (EVs): A reduction in taxes on battery raw materials could lead to lower prices for electric scooters and cars, promoting the adoption of sustainable transportation.
• Cancer Medicines and Medical Devices: Import duties on life-saving drugs and critical medical equipment may be reduced, potentially lowering treatment costs.
• Domestically Manufactured Electronics: Televisions, refrigerators, and other home appliances manufactured in India may benefit from tax or duty relief, making them more accessible to consumers.

What's Getting Dearer?

Conversely, some goods are likely to become more expensive.

• Imported Luxury Goods: Higher customs duties could increase the prices of imported luxury items such as high-end watches, footwear, and designer clothing.
• Foreign Premium Cars: Imported foreign premium cars brought in as completely built units may also become more expensive.
• Imported Cosmetics: Imported cosmetics, perfumes, and beauty products could face price hikes.
• "Sin" Goods: "Sin" goods like cigarettes, pan masala, and tobacco products are set to become more expensive, with the government preparing to increase taxes on these items. This includes an additional excise duty on cigarettes and a health and national security cess on pan masala.
• Gold and Silver: Changes in import duty on gold and silver may impact jewellery prices.

Tax Relief and Savings

Beyond changes to specific product prices, the budget may also focus on increasing direct savings for individuals. There is speculation that under the new tax regime, income up to Rs 15 lakh could move closer to a zero-tax structure. Additionally, the standard deduction for salaried individuals may be increased from Rs 75,000 to Rs 1,00,000. The government has already eased middle-class tax liabilities, with income up to ₹12 lakh exempt and ₹12.75 lakh for salaried persons. The new tax regime offers lower tax rates but fewer deductions.

Other Key Proposals

• Capital Expenditure Target: The government has set a capital expenditure target for FY27 at Rs 12.2 lakh crore.
• Container Manufacturing: A new scheme is proposed to promote container manufacturing with a budgetary allocation of Rs 10,000 crore over five years.
• Textile Sector: A comprehensive program is proposed to strengthen the textile sector, including the National Fibre Scheme and the Textile Expansion and Employment Scheme.
• MSMEs: The government aims to support MSMEs with a three-pronged approach.
• Reforms: Finance Minister Nirmala Sitharaman stated that the government has implemented over 350 reforms aimed at boosting employment and economic growth.
• Biopharma SHAKTI and ISM 2.0: To scale up manufacturing in strategic sectors, initiatives like Biopharma SHAKTI and India Semiconductor Mission (ISM) 2.0 will be launched.
• Rare Earth Corridors: Dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu will be established.

Impact and Expectations

Budget 2026 is expected to balance inflation control, growth, and consumer relief. While some items may become cheaper, others could become more expensive. Overall, the budget reflects the government's focus on boosting domestic manufacturing, promoting economic growth, and improving the lives of its citizens.