Union Budget 2026 Highlights: Top 14 Announcements That Define This Budget
- 1st February 2026
- 01:20 PM
- 3 min read
PL Capital
Summary
Here are the major highlights of all key announcements made in the Union Budget 2026–27, spanning fiscal strategy, sectoral reforms, infrastructure push, manufacturing, defence, taxation, and long-term growth priorities.Mumbai | 1:20 PM
1. Capital Expenditure Raised to ₹12.2 Lakh Crore
Public capex for FY27 has been increased to ₹12.2 lakh crore, up from ₹11.2 lakh crore in FY26, marking the 11th consecutive year of higher capital spending
2. Fiscal Deficit Pegged at 4.3% of GDP
The fiscal deficit for FY27 is estimated at 4.3% of GDP, improving from 4.4% in FY26, in line with the government’s debt consolidation path
3. Manufacturing Push in 7 Strategic Sectors
The Budget targets scale-up across semiconductors, electronics, biopharma, textiles, chemicals, capital goods, and rare earths, under the first Kartavya to accelerate growth.
Government plans to establish Rare Earth Corridors in mineral-rich states like Odisha and Kerala.
4. Biopharma SHAKTI: ₹10,000 Crore Over 5 Years
The Biopharma SHAKTI mission gets ₹10,000 crore to build India as a global biologics and biosimilars hub, including 3 new NIPERs and 1,000+ clinical trial sites
5. Semiconductors & Electronics Manufacturing Get Major Push
The government launched India Semiconductor Mission (ISM) 2.0, expanding focus to equipment, materials, full-stack Indian IP, and resilient supply chains.
Complementing this, the Electronics Components Manufacturing Scheme outlay was raised to ₹40,000 crore from ₹22,919 crore, reflecting strong industry response and reinforcing India’s electronics manufacturing ecosystem.
6. High-Speed Rail Corridors Announced
The Budget proposed seven high-speed rail corridors as growth connectors to improve inter-city mobility and regional economic integration. The proposed corridors are Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru, Hyderabad–Chennai, Chennai–Bengaluru, Delhi–Varanasi, and Varanasi–Siliguri.
7. MSME Support: ₹10,000 Crore Growth Fund
A ₹10,000 crore SME Growth Fund was announced to create “Champion MSMEs”, along with a ₹2,000 crore top-up to the Self-Reliant India Fund
8. Defence Allocation Rises to ~₹7.45 Lakh Crore
Defence spending has been raised to about ₹7.45 lakh crore, with emphasis on capital outlay and domestic procurement in line with Atmanirbharta.
9. Disinvestment Target Set at ₹80,000 Crore
The government has set a ₹80,000 crore divestment and asset monetisation target for FY27, focusing on strategic stake sales and asset recycling rather than aggressive PSU privatisation.
10. STT Hike on Derivatives
STT on equity futures increased to 0.05% from 0.02%, while STT on options premium and exercise raised to 0.15% from rate of 0.1%/0.125% respectively, signalling tighter control on speculative trading
11. ₹20,000 Crore for Carbon Capture (CCUS)
A ₹20,000 crore outlay over five years has been announced for Carbon Capture, Utilisation and Storage across power, steel, cement, refineries and chemicals
12. Incentive for Municipal Bonds to Deepen Sub-Sovereign Debt Market
To encourage larger and more liquid bond issuances by cities, the Budget announced an incentive of ₹100 crore for a single municipal bond issuance exceeding ₹1,000 crore.
The existing AMRUT scheme, which supports smaller municipal bond issuances of up to ₹200 crore, will continue.
The move aims to deepen the sub-sovereign bond market, strengthen urban financing, and reduce dependence on budgetary transfers for infrastructure funding.
13. Services Sector Gets Centre Stage
The government announced a renewed push to make the services sector a core growth and jobs engine, including the setting up of a High-Powered ‘Education to Employment and Enterprise’ Standing Committee. The aim is to align skills, education, and emerging technologies (including AI) to boost services exports and employment, with a long-term target of raising India’s global services share to 10% by 2047.
14. New Income Tax Act from April 1, 2026
The Income Tax Act, 2025 will replace the 1961 Act, promising simpler compliance, redesigned forms, and reduced litigation
To read the complete Union Budget 2026–27 document, click here.
