In her ninth consecutive budget presentation on Sunday, February 1, 2026, Finance Minister Nirmala Sitharaman delivered the Union Budget 2026-27 in the Lok Sabha, with "India", "tax," and "support" emerging as frequently used words, reflecting the budget's core themes. The budget emphasized policy continuity and long-term economic goals.

Sitharaman highlighted that India's economic trajectory over the past 12 years has been marked by stability, fiscal discipline, sustained growth, and moderate inflation. She attributed this to conscious choices made by the government, even during times of uncertainty. The government has consistently prioritized action over ambivalence, reform over rhetoric, and people over populism, undertaking structural reforms, maintaining fiscal prudence and monetary stability, and emphasizing public investment.

Key Highlights of the Budget:

• Fiscal Prudence: Sitharaman stated the government's commitment to prudent fiscal management, aiming for a debt-to-GDP ratio of 50±1 percent by 2030-31. The fiscal deficit is estimated to be 4.3 percent of GDP in BE 2026-27, compared to 4.4 percent in the Revised Estimate for 2025-26. The total expenditure is estimated at ₹49.6 lakh crore, with capital expenditure of about ₹11 lakh crore. The net tax receipts are estimated at ₹26.7 lakh crore.
• Capital Expenditure: The budget aims to boost capital expenditure, with a target of ₹12.2 lakh crore for FY27, up from ₹11.2 lakh crore. Priority sectors include railways, renewable energy, power transmission, defense, and urban transport.
• Support for Domestic Manufacturing: The budget includes proposals for Customs and Central Excise to simplify the tariff structure, support domestic manufacturing, promote export competitiveness and correct duty inversion. The government has increased the outlay for the Electronics Components Manufacturing Scheme to ₹40,000 crore.
• Semiconductor Industry: The budget includes the launch of ISM 2.0 to strengthen semiconductor manufacturing and supply chains.
• Rare Earth Minerals: The budget supports the development of rare earth corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.
• MSME Support: Provisions have been made for MSMEs with funds running into thousands of crores.
• Tourism: The budget includes upskilling 10,000 guides in 20 tourist sites through a standardized, high-quality 12-week training course in hybrid mode, in collaboration with an IIM.
• Sports: The Khelo India Mission will transform the sports sector over the next decade.
• Agriculture: Bharat-Vistaar, a multilingual AI tool, will integrate the Agristack portals and the ICAR package on agricultural practices with AI systems.
• Taxation: The rate of final tax will be reduced to 14 percent from the current MAT rate of 15 percent. Further, the brought forward MAT credit of taxpayers accumulated till 31st March 2026, will continue to be available to them for set-off.
• Changes for NRIs: The government has increased duty-free allowances for NRIs traveling to India. Property transactions have been simplified, allowing resident buyers to use their PAN instead of needing a TAN when buying property from NRIs.

Reactions to the Budget:

• Union Education Minister Dharmendra Pradhan welcomed the enhanced allocation for education, noting that the allocation has risen from ₹1.28 lakh crore to ₹1.39 lakh crore, an increase of 8.27 percent.
• The budget introduces a new benefit for small taxpayers, allowing them to obtain certificates for lower or zero tax deduction automatically through a computerized system.
• Securities Transaction Tax (STT) on futures and options trading has been increased to discourage speculative tendencies.
• The budget proposes setting up dedicated Real Estate Investment Trusts (REITs) for Central Public Sector Enterprises (CPSEs) to better utilize their real estate assets.

Overall, Budget 2026 emphasizes fiscal prudence, infrastructure development, support for domestic manufacturing, and long-term economic growth.