Union Budget 2026 sets capital spending at ₹12.2 lakh crore and targets a fiscal deficit of 4.3%, balancing growth priorities with cautious fiscal management.
By PC Bureau
New Delhi, February 1, 2026: Finance Minister Nirmala Sitharaman on Sunday unveiled an ambitious Union Budget for 2026–27, raising capital expenditure to Rs 12.2 lakh crore, while pegging total government spending at Rs 53.5 lakh crore. The government expects net tax receipts of Rs 28.7 lakh crore, with the fiscal deficit estimated at 4.3% of GDP.
Here is a 10-point cheat sheet of the key announcements:
1. Big Push for Semiconductors and Emerging Tech
The Finance Minister announced a Rs 40,000 crore outlay over five years for the semiconductor sector, focusing on research, training centres, and domestic capacity building. A new committee will review the impact of emerging technologies, including Artificial Intelligence, on the services sector.
2. Major Tax Announcements
A tax holiday until 2047 was announced for foreign cloud service providers setting up data centres in India. Sitharaman also proposed a simplified corporate tax regime and rationalisation of prosecution provisions under the Income Tax Act.
*Capex raised to ₹12.2 lakh crore; infra risk guarantee proposed*
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3. Seven High-Speed Rail Corridors
Seven high-speed rail routes were announced as ‘growth connectors’, including:
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Mumbai–Pune
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Hyderabad–Pune
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Hyderabad–Bengaluru
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Chennai–Bengaluru
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Delhi–Varanasi
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Varanasi–Siliguri
4. Budget Anchored on Three ‘Kartavyas’
The budget is guided by three core responsibilities —
accelerating growth and competitiveness, fulfilling aspirations, and ensuring equitable access to resources and opportunities across regions and communities.
5. Strategic Manufacturing and MSME Expansion
Six priority interventions were outlined, including scaling up strategic manufacturing, creating ‘champion MSMEs’, and establishing India as a global biopharma hub under the ‘Biopharma Shakti Mission’, with an outlay of Rs 10,000 crore over five years.
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6. Textile Parks and Khadi Push
The government will set up mega textile parks under ‘challenge mode’, roll out a National Fibre Scheme, and launch the Mahatma Gandhi Gram Samaj initiative to strengthen Khadi and handicrafts, supported by a national upskilling programme.
7. Banking and Forex Framework Review
A high-level committee will conduct a comprehensive review of the banking sector, alongside a full review of the Foreign Exchange Management framework, signalling major reforms in financial governance.
8. Deepening Financial Markets
Three key steps were announced to attract global capital:
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Market-making framework for corporate bonds
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New investment route for foreign individuals in Indian equities
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Higher ownership limits for foreign investors in listed firms
9. Rare Earth Corridors in Four States
To reduce India’s reliance on China, dedicated rare earth corridors will be established in Tamil Nadu, Kerala, Odisha and Andhra Pradesh, promoting mining, processing, research and manufacturing.
10. Poverty Reduction & Medical Tourism Push
Sitharaman said nearly 25 crore Indians have exited multi-dimensional poverty in the past decade. She also announced plans for five regional medical tourism hubs, integrating Aayush centres, diagnostics and rehabilitation infrastructure to boost employment and healthcare exports.
In sum, Budget 2026 combines fiscal discipline with aggressive structural reforms, positioning manufacturing, technology, financial markets and infrastructure at the centre of India’s long-term growth strategy.
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📦 BUDGET 2026: 10-POINT CHEAT SHEET
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1️⃣ Capex & Fiscal Math
• Capital Expenditure: ₹12.2 lakh crore
• Total Government Spending: ₹53.5 lakh crore
• Net Tax Receipts: ₹28.7 lakh crore
• Fiscal Deficit: 4.3% of GDP
2️⃣ Semiconductor Push
• ₹40,000 crore over 5 years for semiconductor R&D & training
• Focus on Indian IP & full-stack manufacturing
3️⃣ Emerging Tech Review
• Committee to study AI & new tech impact on services sector
4️⃣ Tax Measures
• Tax holiday till 2047 for foreign cloud firms setting up data centres
• Simplified corporate tax regime
• Rationalised prosecution under IT Act
5️⃣ High-Speed Rail Corridors
• Mumbai–Pune
• Hyderabad–Pune
• Hyderabad–Bengaluru
• Chennai–Bengaluru
• Delhi–Varanasi
• Varanasi–Siliguri
6️⃣ Manufacturing & MSMEs
• Strategic manufacturing scale-up
• Creation of ‘Champion MSMEs’
• Biopharma Shakti Mission – ₹10,000 crore (5 years)
7️⃣ Textile & Khadi Boost
• Mega textile parks (challenge mode)
• National Fibre Scheme
• Mahatma Gandhi Gram Samaj for Khadi & handicrafts + upskilling
8️⃣ Banking & Forex Reforms
• High-level committee to review banking sector
• Comprehensive review of FEMA framework
9️⃣ Financial Market Deepening
• Market-making framework for corporate bonds
• New route for foreign individuals in equities
• Higher FPI ownership limits
🔟 Rare Earth & Social Push
• Rare earth corridors in TN, Kerala, Odisha, Andhra Pradesh
• 25 crore exited multidimensional poverty
• 5 regional medical tourism hubs with AYUSH centres
