In her ninth consecutive Union Budget, Finance Minister Nirmala Sitharaman delivered a growth-oriented speech on Sunday, February 1, 2026. The budget combined aggressive infrastructure spending with strategic technological missions and middle-class tax relief.
Here are the 10 key highlights from the Union Budget 2026:
1. Massive Capex Boost
The government significantly increased its capital expenditure outlay to ₹12.2 lakh crore for FY27. This 9% increase from the previous year is intended to sustain the momentum in infrastructure development, including roads, railways, and ports.
2. India Semiconductor Mission (ISM) 2.0
Building on the success of the first phase, the FM launched ISM 2.0 with a substantial outlay of ₹40,000 crore. The mission focusses on chip-making equipment, materials, full-stack chip design and indigenous intellectual property.
3. Strategic Rail Corridors
To enhance national logistics, the budget proposed seven high-speed rail corridors acting as "growth connectors." Key routes include Mumbai-Pune, Hyderabad-Pune, Delhi-Varanasi, and Chennai-Bengaluru.
4. Tax Relief on Education and Travel
In a move to benefit the middle class, the TCS (Tax Collected at Source) on overseas tour packages and remittances for education and medical purposes was slashed from a range of 5–20% down to a uniform 2%.
5. New Integrated Textile Programme
A comprehensive textile expansion scheme was introduced to modernise clusters. It includes the National Fibre Scheme for self-reliance in natural and man-made fibers and the Samarth 2.0 initiative for large-scale skilling.
6. Digital & AI Innovation: "Bharat Vistar"
The FM unveiled Bharat Vistar, a multilingual AI tool designed to integrate the national "agri-stack." This tool aims to provide farmers with data-driven insights and real-time support in their local languages.
7. Health & Wellness Infrastructure
The budget proposed establishing 1,000 accredited clinical trial sites across India to decentralise medical research. Additionally, three new All-India Institutes of Ayurveda and five regional medical hubs for value tourism were announced.
8. "She-Mark" and "She Marts"
To empower women entrepreneurs, the government introduced the "She-Mark" certification to ease access to credit. Furthermore, "She Marts"—community-owned retail outlets—will be established to help local entrepreneurs reach wider markets.
9. Fiscal Deficit and 16th Finance Commission
The government accepted the 16th Finance Commission's recommendation to retain the states' share of vertical devolution at 41%. The fiscal deficit target for FY27 was set at 4.3% of GDP, slightly down from 4.4% in the previous year.
10. Biopharma Shakti and Rare Earth Corridors
A new Biopharma Shakti scheme with a ₹10,000 crore outlay was launched to make India a global manufacturing hub. Additionally, dedicated rare-earth corridors will be developed in Odisha, Kerala, Andhra Pradesh and Tamil Nadu to secure critical mineral supplies.
