The Union Budget 2026, presented on Sunday, February 1, 2026, by Finance Minister Nirmala Sitharaman, outlines the government's key priorities for the financial year 2026-27, balancing economic stability with growth and development in a complex global environment. The budget focuses on strengthening domestic demand, boosting capital expenditure, and promoting inclusive growth. Here are ten significant announcements from the budget:

1. Defence: The Ministry of Defence received a substantial boost with an allocation of ₹7.84 lakh crore for FY27, a 15.3% increase from the previous year's ₹6.81 lakh crore. This increase aims to enhance military readiness and modernization amid security concerns. Capital expenditure for defence has also risen to approximately ₹2.31 lakh crore, compared to ₹1.80 lakh crore the previous year, demonstrating a focus on advanced weapon systems and domestic defence production. The budget also includes exemptions from basic customs duty on components and raw materials for the manufacturing and maintenance of aircraft within the defence sector.

2. Education: Education is positioned as a central element of national development, with public spending rising to ₹1.28 lakh crore, a 6.65% increase. The budget proposes establishing a girls' hostel in every district to support women in higher education, particularly in science and technology. Five university townships are planned near industrial and logistics corridors to link education with employment opportunities. An Education to Employment and Enterprise Committee will review courses to align them with emerging technologies like AI. The budget emphasizes skilling and youth employment to bridge the education-employment gap.

3. Railways: The budget emphasizes infrastructure development, including the expansion of the railway network. Seven new high-speed rail corridors will connect Mumbai to Pune, Pune to Hyderabad, Hyderabad to Chennai, Hyderabad to Bengaluru, Chennai to Bengaluru, Delhi to Varanasi, and Varanasi to Siliguri. These corridors are intended to serve as "growth connectors" and promote environmentally sustainable passenger systems. A new dedicated east-west freight corridor will connect Dankuni in the east with Surat in the west.

4. Income Tax: While income tax slabs remain unchanged, the budget includes several changes regarding compliance and filing. The Tax Collected at Source (TCS) on overseas tour packages and remittances for education and medical expenses under the Liberalised Remittance Scheme (LRS) has been reduced to 2% from 5%. Taxpayers can now revise their Income Tax Returns (ITR) until March 31 of the assessment year with a nominal fee. Buyback proceeds will be taxed as capital gains for all shareholders. The Securities Transaction Tax (STT) on commodity futures has increased from 0.02% to 0.05%, and on options premium and exercise of options to 0.15%.

5. MSMEs and Manufacturing: The budget aims to strengthen domestic manufacturing through various schemes, including the Bio-Pharma Shakti Mission, Semiconductor Mission 2.0, and the Electronics Component Manufacturing Scheme. There will be focused attention on critical minerals, rare earth corridors, and new schemes for the textile sector. The government plans to revive 200 legacy industrial clusters. The budget also supports MSMEs by introducing Corporate Mitras to help them navigate compliance requirements.

6. Tourism: Recognizing tourism as a key employment-generating sector, the budget proposes training 10,000 tourist guides across 20 iconic destinations. A National Destination Digital Knowledge Grid will digitally document cultural, spiritual, and heritage sites, creating jobs for local researchers and content creators.

7. Fiscal Deficit and Capital Expenditure: The fiscal deficit for FY27 is projected at 4.3% of GDP. Public capital expenditure is proposed to be increased to ₹12.2 lakh crore for FY27, up from ₹11.2 lakh crore in FY26. This investment aims to sustain infrastructure momentum and boost economic growth.

8. Technology and AI: The budget emphasizes the expansion of India's AI and digital capabilities, promoting compute capacity, cloud infrastructure, and data services. Long-term tax holidays are announced for foreign companies establishing data centers and cloud facilities in India. The budget also focuses on skill development in AI through initiatives like AVGC labs and STEM programs.

9. Healthcare: Healthcare education receives a boost with the proposal to set up three new National Institutes of Pharmaceutical Education and Research and upgrade seven existing institutes. The budget also aims to create a network of 1,000 accredited clinical trial centers. Customs duties are waived on 17 critical cancer drugs to make treatments more affordable.

10. Other Key Announcements: The budget includes a focus on green energy and digital public infrastructure. It also proposes developing Buddhist Circuits in the North East Region. The tariff rate on all dutiable goods imported for personal use will be reduced from 20% to 10%. The Union Budget 2026 aims to promote economic growth, improve infrastructure, and enhance the ease of living for citizens.