Union Budget 2026: 10 Key Announcements from FM Sitharaman’s Record Ninth Budget

Finance Minister Nirmala Sitharaman on Sunday, February 1, 2026, presented her record ninth Union Budget, unveiling a ₹53.5 lakh crore financial blueprint for 2026–27. The Budget strikes a careful balance between fiscal consolidation and growth acceleration, even as global economic uncertainties persist.

Staying committed to fiscal discipline, the government outlined a calibrated path to reduce the fiscal deficit, while sharply stepping up public investment in infrastructure, defence, manufacturing, healthcare, and next-generation sectors such as electronics, biopharma and data centres. With capital expenditure rising to ₹12.2 lakh crore and multiple policy reforms announced, the Budget aims to keep India’s growth engine resilient and investment-friendly.

Below are the 10 biggest stories shaping business, markets, and policy from Union Budget 2026–27.

Union Budget 2026–27 biggest stories

Fiscal Discipline Remains the Cornerstone

Fiscal Deficit Targeted at 4.3% of GDP

Finance Minister Nirmala Sitharaman outlined a steady glide path for fiscal consolidation, pegging the Centre’s fiscal deficit at 4.3% of GDP for 2026–27, marginally lower than the 4.4% budgeted for the current financial year.

This signals the government’s continued focus on long-term macroeconomic stability while retaining flexibility to support growth through targeted spending.

Infrastructure Push Gets a Fresh Boost

Capital Expenditure Raised to ₹12.2 Lakh Crore

The Union Budget 2026 has pegged capital expenditure (capex) at ₹12.2 lakh crore, up from the revised estimate of ₹10.9 lakh crore for FY 2025–26.

The allocation represents a 9% increase over the previous year’s budgeted outlay, reinforcing infrastructure-led growth as a central pillar of India’s economic strategy. Public investment continues to act as a demand anchor amid global slowdown concerns.

Markets Face Higher Trading Costs

STT on Futures and Options Hiked Sharply

Finance Minister Nirmala Sitharaman proposed a significant hike in Securities Transaction Tax (STT) on derivatives.

• STT on futures has been raised to 0.05% from 0.02%, a 150% increase

• STT on options has been increased to 0.15% from 0.1%, a 50% rise

The move is expected to impact high-frequency trading and derivatives volumes, while also contributing to revenue mobilisation.

Defence Spending Sees a Strong Jump

Defence Budget Crosses ₹7.85 Lakh Crore

India significantly stepped up defence spending in the Union Budget 2027, with an allocation of ₹7.85 lakh crore, up 15.2% from FY26’s budgeted ₹6.81 lakh crore.

Defence Capital Modernisation Strengthened

Overall defence capital expenditure rose 20.1% to ₹2.31 lakh crore, underlining the government’s emphasis on long-term capability building, indigenous manufacturing, and modernisation of the armed forces.

High-Speed Rail Corridors Announced

Seven New Routes for Faster Inter-City Travel

Union Finance Minister Nirmala Sitharaman announced the development of high-speed rail corridors across seven routes, aimed at expanding faster inter-city connectivity.

The move is expected to boost logistics efficiency, regional mobility, and economic activity along key transport corridors.

Major Push for Biopharma Innovation

₹10,000 Crore Allocated for Biopharma Shakti

The government earmarked ₹10,000 crore for Biopharma Shakti over the next five years. For FY 2026–27 alone, an allocation of ₹500 crore has been made.

The initiative aims to strengthen India’s biopharmaceutical research, manufacturing capabilities, and global competitiveness in advanced therapeutics.

Electronics Manufacturing Gets a Big Boost

Outlay Doubled to ₹40,000 Crore

In a strong push to deepen the domestic electronics supply chain, Finance Minister Nirmala Sitharaman proposed increasing the outlay for the Electronic Components Manufacturing Scheme to ₹40,000 crore.

The enhanced allocation supports India’s ambition to reduce import dependence, scale semiconductor-linked manufacturing, and strengthen its position as a global electronics hub.

Healthcare Spending Rises by 10%

Health Budget Crosses ₹1.06 Lakh Crore

The healthcare budget was increased by 10% compared to last year. The Ministry of Health and Family Welfare received an allocation of ₹1,06,530.42 crore.

Medical Hubs and Tourism Expansion

The government proposed a scheme to support states in setting up five regional medical hubs, including institutions such as NIMHANS. Additionally, five medical tourism hubs will be established in partnership with the private sector, involving Apollo, Max, Fortis, Dr Lal Pathlabs, and Metropolis.

Changes to Sovereign Gold Bonds Tax Rules

Capital Gains Exemption Tweaked

In the Union Budget 2026, the government proposed changes to the capital gains tax exemption on Sovereign Gold Bonds (SGBs) issued by the Reserve Bank of India.

The move is likely to influence investor behaviour and gold-linked investment strategies going forward.

Customs Duties and Baggage Rules Simplified

Relief for International Travellers

To ease costs for international travellers and streamline procedures, Finance Minister Nirmala Sitharaman proposed a reduction in tariff rates on personal imports and announced revisions to baggage clearance rules.

The measures aim to simplify customs compliance and enhance passenger convenience at Indian airports.

Conclusion

Union Budget 2026–27 reflects the government’s attempt to balance growth, stability, and structural reform. With higher infrastructure and defence spending, strong support for manufacturing and healthcare, and targeted tax and customs changes, Finance Minister Nirmala Sitharaman’s ninth Budget lays out a roadmap focused on long-term resilience. As India navigates global economic uncertainties, the Budget underscores a strategy anchored in fiscal discipline, investment-led growth, and sector-specific policy support.