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Union Budget 2026–27: Key Highlights & Market Reading

On the occasion of Magh Purnima and the birth anniversary of Guru Ravidas, India’s 30th Finance Minister, Nirmala Sitharaman, presented her 9th consecutive Union Budget.

The Budget opened with a review of India’s economic performance over the last 12 years, highlighting macro stability achieved since the current central government assumed office.

“India’s economic trajectory has been marked by stability, fiscal discipline, sustained growth and moderate inflation. These outcomes reflect deliberate policy choices, even during periods of global uncertainty. The Government has consistently chosen action over ambivalence, reform over rhetoric, and people over populism.”

Three Kartavya Framework

Kartavya 1: Accelerate and Sustain Economic GrowthFocus on productivity, competitiveness, and resilience to global volatility.

Kartavya 2: Fulfil Aspirations and Build CapacityStrengthen human capital and employment readiness.

Kartavya 3: Sabka Saath, Sabka VikasEnsure inclusive access to resources, opportunities, and growth.

Kartavya 1: Six Key Areas of Intervention

1. Scaling up manufacturing in 7 strategic and frontier sectors
2. Rejuvenation of legacy industrial sectors
3. Creation of “Champion MSMEs”
4. Strong push to infrastructure
5. Long-term energy security
6. Development of City Economic Regions (CERs)

Major Sectoral Announcements
Manufacturing & Industrial Push

#Biopharma SHAKTI
Outlay of ₹10,000 crore over 5 years to strengthen domestic production of biologics and biosimilars.

#India Semiconductor Mission (ISM) 2.0
Focus on equipment manufacturing, full-stack Indian IP, and supply chain resilience.

#Electronics Components Manufacturing Scheme
Outlay increased from ₹22,919 crore to ₹40,000 crore.

#Rare Earth Corridors
Support for mineral-rich states, including Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.

#Three Dedicated Chemical Parks

#Container Manufacturing Scheme
Allocation of ₹10,000 crore over 5 years.

#SME Growth Support
₹10,000 crore SME Growth Fund
₹2,000 crore top-up to the Self-Reliant India Fund

#Professional Skill Development
ICAI, ICSI, and ICMAI to design modular, industry-linked courses.

Infrastructure & Energy

#Public Capex increased to ₹12.2 lakh crore
#Infrastructure Risk Guarantee Fund for partial credit guarantees
#New Dedicated Freight Corridors
#Carbon Capture, Utilization & Storage (CCUS)
₹20,000 crore over 5 years
#City Economic Regions (CERs)
₹5,000 crore per CER over 5 years
#Seven High-Speed Rail Corridors as growth connectors

Financial Sector

#Formation of a High-Level Committee on Banking for Viksit Bharat
# Municipal Bond Incentive 
#₹100 crore incentive for bond issuances exceeding ₹1,000 crore

Kartavya 2: Aspirations & Capacity Building

Education, Employment & Enterprise

#High-powered Standing Committee focused on the Services Sector

Healthcare

#Positioning India as a Medical Tourism Hub
#Five Regional Medical Hubs via PPP model

AYUSH

#Establishment of 3 new All India Institutes of Ayurveda

Animal Husbandry

#Addition of 20,000+ veterinary professionals

Orange Economy (Creative Industries)

#AVGC Content Creator Labs in 15,000 schools and 500 colleges
#New National Institute of Design in eastern India

Tourism

#National Institute of Hospitality
#Upskilling 10,000 tourist guides
#Development of 15 archaeological sites

Sports

#Launch of Khelo India Mission

Kartavya 3: Inclusive Growth

# Increasing farmer incomes
#Empowerment of Divyangjan and vulnerable communities
#Special focus on Purvodaya states and North-East India

Fiscal Consolidation

#Target Debt-to-GDP ratio: 50 ±1% by 2030–31
#Debt-to-GDP for BE 2026–27: 55.6%
#Fiscal deficit: 4.3% of GDP

Direct Taxes

#Simplified income tax rules and forms to be notified
#Return revision deadline extended to 31 March

IT & Digital Services

#Safe harbour margin fixed at 15.5%
#Threshold raised from ₹300 crore to ₹2,000 crore
#Data centre services: 15% cost-based safe harbour

Capital Market & Transaction Taxes

#STT on Futures increased to 0.05%
#STT on Options premium and exercise raised to 0.15%

Customs & Duty Exemptions

#Duty-free import limit raised from 1% to 3% of FOB value
#Customs duty exemptions for:
Lithium-ion cell manufacturing capital goods
Nuclear power project imports
Aircraft manufacturing
17 cancer-related drugs
#Personal-use import tariff reduced from 20% to 10%
#Biogas value excluded for excise calculation on blended CNG

Market & Public Sentiment

While the Budget focused heavily on structural reforms and industrial capacity, it offered limited immediate relief to salaried individuals and retail taxpayers. Expectations around healthcare spending, defence, and direct income support were largely unmet.

Markets reacted negatively in the short term. The Nifty witnessed a sharp decline, slipping to an intraday low of 24,571.75. However, buying interest emerged at lower levels, providing support and triggering a rebound. The index is now attempting to stabilize and sustain above the crucial 25,000 mark.

Overall, the Budget appears process-driven and long-term in intent, but lacked clear near-term wins for both the common taxpayer and consumption-led sectors.

Potential Sectoral Impact

Likely Positively Impacted

Biopharma SHAKTI
Biocon
Torrent Pharma
Sun Pharma

India Semiconductor Mission 2.0
CG Power
HCLTech
L&T Technology Services

Container Manufacturing & Rail Infra
CONCOR
IRCON
Titagarh Rail Systems
RITES

Solar & Renewable Manufacturing
Borosil Renewables
Waaree Energies
Vikram Solar

Likely Negatively Impacted

Capital Market Intermediaries
CDSL
Motilal Oswal Financial Services
MCX
Angel One