Finance Minister Nirmala Sitharaman presented the Union Budget 2026 in an 85-minute-long speech in the Lok Sabha on Sunday. In her address to the lower house, she highlighted three core priorities of the Government of India i.e. boosting economic growth, building people’s capacities, and ensuring equitable access to resources and opportunities, all aligned with the vision of ‘Sabka Saath, Sabka Vikas’.
From fiscal consolidation to a push for medical tourism, here are the 10 key takeaways from Union Budget 2026:
- Increase in Capital Expenditure
The Finance Minister announced a marginal increase in the capital expenditure target, keeping economic growth in focus. Capital expenditure has been raised from ₹11.2 lakh crore in FY26 to ₹12.2 lakh crore for FY27, continuing the trend of sustained increased in government capex over the years.
Sitharaman said, “Public capex has increased manifold from ₹2 lakh crore in FY 2014–15 to an allocation of ₹11.2 lakh crore in BE 2025–26. In FY 2026–27, I propose to increase it to ₹12.2 lakh crore to continue the momentum.”
- Reduction in Fiscal Deficit
The Budget Estimate (BE) of the fiscal deficit for FY27 is pegged at 4.3% of GDP, while the Revised Estimate (RE) for FY26 stands at 4.4%.
The Finance Minister said, “In RE 2025–26, the fiscal deficit has been estimated at par with the BE of 2025–26 at 4.4% of GDP. In line with the new fiscal prudence path of debt consolidation, the fiscal deficit in BE 2026–27 is estimated to be 4.3% of GDP.”
The projected debt-to-GDP ratio is 55.6% in BE for 2026-27 compared with 56.1% in RE for FY25 -26. Net market borrowings from dated securities are estimated at ₹11.7 lakh crore, while gross market borrowings are projected at ₹17.2 lakh crore. The remaining financing will come from small savings and other sources.
- India to Get Seven New High-Speed Rail Corridors
The Finance Minister announced the addition of seven new high-speed rail corridors to promote environmentally sustainable passenger travel:
- Mumbai–Pune
- Pune–Hyderabad
- Hyderabad–Bengaluru
- Hyderabad–Chennai
- Chennai–Bengaluru
- Delhi–Varanasi
- Varanasi–Siliguri
- Strengthening Bond Markets
To strengthen the corporate bond market, the Finance Minister proposed a market-making framework to improve access to funds and derivatives linked to corporate bond indices.
She said, “To encourage the issuance of higher-value municipal bonds by large cities, I propose an incentive of ₹100 crore for a single bond issuance exceeding ₹1,000 crore. The current scheme under AMRUT, which incentivises issuances up to ₹200 crore, will continue to support smaller and medium towns.”
- High-Level Committee on Banking
The Finance Minister proposed setting up a high-level committee on banking to comprehensively review the banking system and recommend reforms to support India’s next phase of economic growth.
“I propose setting up a high-level committee on banking for Viksit Bharat to align the sector with India’s growth ambitions while safeguarding financial stability, inclusion, and consumer protection,” she said.
- Increase in Investment Limits for NRIs
To attract more NRI capital, the investment limit for NRIs has been increased from 5% to 10%, while the overall investment cap has been raised from 10% to 24%. This move is expected to improve access to long-term overseas funds.
- Higher Securities Transaction Tax (STT)
The Securities Transaction Tax has been increased by over 50%. STT on futures has been raised from 0.02% to 0.05%, while STT on options has been increased to 0.15%.
The Finance Minister said, “I propose to raise the STT on futures to 0.05% from the present 0.02%. STT on options premium and exercise of options are proposed to be raised to 0.15%.”
- Establishment of Five Regional Medical Hubs
To promote medical tourism, the government will support states in establishing five regional medical hubs in partnership with the private sector.
“These hubs will serve as integrated healthcare complexes combining medical, educational, and research facilities. They will include AYUSH centres, medical value tourism facilitation centres, and infrastructure for diagnostics, post-care, and rehabilitation,” the FM said.
- ₹1.4 Lakh Crore Grants to States
As recommended by the 16th Finance Commission, the Centre will retain the vertical devolution share at 41%.
“I have provided ₹1.4 lakh crore to states for FY 2026–27 as Finance Commission grants, including allocations for rural and urban local bodies and disaster management,” Sitharaman said.
- Tax Holiday Till 2047 for Cloud Service Providers
To boost investment in data centres and critical digital infrastructure, the Finance Minister announced a tax holiday until 2047 for foreign companies providing cloud services globally using data centres based in India.
She added that such companies must provide services to Indian customers through an Indian reseller entity.
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