The Union budget that Union finance minister Nirmala Sitharaman presented Sunday steered clear of showering gifts to the poll-bound states, especially the three critical ones Bengal, Tamil Nadu and Kerala, which have withstood Narendra Modi and the BJP’s electoral onslaught.
In the nearly 90 minutes that Sitharaman spent on the floor of the House reading the salient features of the Budget pegged at Rs. 53.5lakh crore, she referred to being duty-bound to accelerate and sustain economic growth, fulfil aspirations, ensure every family, community and region has access to the country’s resources and the opportunities for equal participation.
The stock markets tanked, the Opposition cried foul – Bengal chief minister Mamata Banerjee called it “Humpty Dumpty Budget” – after Sitharaman read out her speech.
Here are 10 of the highlights:
Thrust on building infrastructure:
The capital expenditure or capex for the 2026-27 fiscal will be raised to Rs 12.2 lakh crore from the Rs 11.2 lakh crore in the current fiscal, a hike of 8.8 per cent.
Capex – government spending on building long-term assets such as roads, railways, ports, housing, power projects and urban infrastructure – is critical for boosting employment, productivity and a key economic growth indicator.
The Union finance minister announced a slew of measures to boost infrastructure projects in the country, especially in tier-II and tier-III cities.
She also proposed a risk guarantee fund for the infrastructure sector. To strengthen domestic manufacturing, a scheme for enhancement for construction and infrastructure equipment will be introduced.
Debt-to-GDP ratio target
The Union finance ministry has set a target of reducing the debt-to-GDP for the 2026-27 fiscal to 55.6 per cent from 56.1 per cent in the current fiscal.
Tax collected at source for education to be reduced
The FM proposed to reduce the tax collection at source (TCS) rate for education and medical purposes under the liberalized remittance scheme (LRS) and sale of overseas tour programme package to 2 per cent from the existing 5 per cent.
It raises hopes of foreign education becoming cheaper.
Under the LRS scheme, all residents including minors are allowed to freely remit up to US $2,50,000 per financial year for any permissible current or capital account transaction.
The TCS rate for purposes other than education and medical will continue to be at 20 per cent.
Data centre push in digital drive
Foreign companies using Indian data centres to provide cloud services to customers worldwide would be given a tax holiday till 2047.
The FM said there is a need to enable critical infrastructure and boost investment in data centres.
To avail the tax holiday, companies need to provide services to Indian customers through an Indian reseller entity.
A ‘National Destination Digital Knowledge Grid’ to digitally document all places of significance across the country, including cultural and spiritual.
Corridors for growth
The Union Budget proposed seven high-speed rail corridors between various cities along with a new dedicated freight corridor connecting Dankuni in Bengal to Surat in Gujarat.
The proposed corridors will be developed between Mumbai and Pune, Hyderabad and Pune, Hyderabad and Bengaluru, Hyderabad and Chennai, Bengaluru and Chennai, Varanasi and Delhi and Varanasi and Siliguri.
Work on the Ahmedabad-Mumbai high-speed corridor is going on.
Tourism push: Trekkers ahoy
Buddhist circuit development scheme proposed for the north-east including Arunachal Pradesh and Sikkim to preserve temples and monasteries.
Fifteen archaeological sites will be developed including Lothal, Dholavira, Rakhigarhi, Sarnath, Hastinapur and Leh Palace as “vibrant cultural destinations.”
Ecologically sustainable trekking trails will be developed in Himachal Pradesh, Uttarakhand and Jammu and Kashmir.
A pilot scheme to upgrade the skills of 10,000 tourist guides in 20 iconic spots across the country will be launched via hybrid mode 12-week training programme in collaboration with the Indian Institute of Management.
Centre to support states in setting up five medical tourism hubs. These hubs will serve as integrated healthcare complexes that combine medical, educational and research facilities.
“Tourism sector has a large role to play in employment generation, forex earnings and expanding the local economy. I propose to set up a National Institute of Hospitality by upgrading the existing National Council for Hotel Management and Catering Technology,” the FM said.
The Institute will serve as a bridge between academia, industry and government.
Medicine and biopharma
The finance minister proposed a Rs 10,000 crore outlay for the Biopharma Shakti programme over the next five years to build an ecosystem for domestic production of biologics and biosimilars.
Biopharmaceuticals, or biologics, are complex medicines manufactured from living organisms, cells, or tissues rather than through chemical synthesis.
The finance minister proposed interventions in six areas, including manufacturing, strategic and frontier sectors, healthcare and advanced technology.
A biopharma-focused network with three new National Institutes of Pharmaceutical Education and Research (NIPERS) has been proposed. The existing seven institutes will be upgraded.
A national network of 1,000 accredited India clinical trial sites will also be created. Major clinical trial sites in the country are currently located in Mumbai, Delhi, Bengaluru, Chennai, and Hyderabad.
For Indians staying abroad
Indians residing abroad will be allowed equity investments in listed Indian companies.
Presenting the Union Budget, finance minister Sitharaman said persons residing outside India will be permitted equity investment through a portfolio investment scheme. A proposal to create a framework with suitable access to funds and derivatives on corporate bond indices has also been proposed.
The minimum alternate tax (MAT) for Indians residing abroad who pay tax on presumptive basis would be exempted.
The FM also proposed a six-month foreign asset disclosure scheme for small taxpayers like students, tech professionals and relocated NRIs.
There will be no liability on taxpayers on the penalty amount for the period of appeal before the first appellate authority, irrespective of the outcome.
The Centre has proposed a joint panel of the corporate affairs ministry and central board of direct taxation for incorporation of income computation and disclosure standards.
Five university towns
Five university townships will be set up in the vicinity of major industrial logistic hubs across the country.
Content-creator labs will be set up in 15,000 secondary schools across the country to support the Mumbai-based Indian Institute of Creative Technologies.
Viksit banking
A high-level committee on banking for Viksit Bharat will be established. The Indian banking sector, the minister said, was characterised by a strong balance sheet, historic highs and profitability, improved asset quality and coverage.