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Remaining committed to fiscal consolidation, the Budget, presented in the Lok Sabha, pegged the fiscal deficit for 2026-27 at 4.3 percent of GDP while improving the debt-GDP ratio at 55.6 per cent in 2026-27 as against 56.1 percent in the revised estimates of 2025-26.
Finance Minister Nirmala Sitharaman presents Union Budget 2026–27
New Delhi: The Union Budget for 2026-27 presented today by Finance Minister Nirmala Sitharaman continued the momentum on government capital expenditure with a sizeable allocation of Rs 12.2 lakh crore, gave a boost to the MSME sector but disappointed the middle class with no further tax relief and upset the stock market as well.
Remaining committed to fiscal consolidation, the Budget, presented in the Lok Sabha, pegged the fiscal deficit for 2026-27 at 4.3 percent of GDP while improving the debt-GDP ratio at 55.6 per cent in 2026-27 as against 56.1 percent in the revised estimates of 2025-26.
“Today, we face an external environment in which trade and multilateralism are imperilled and access to resources and supply chains are disrupted. New technologies are transforming production systems while sharply increasing demands on water, energy and critical minerals,” Sitharaman said in her nearly 90-minute speech.
A scheme for Rare Earth Permanent Magnets was launched in November 2025, she said adding “we now propose to support the mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated Rare Earth Corridors to promote mining, processing, research and manufacturing.”
The initiative on rare earth minerals is crucial in the face of a fragile geo-political scenario and disruptions in the supply chain of key raw materials.
Likewise, to enable self-reliance in the emerging technology like Artificial Intelligence (AI) the government has proposed to India Semiconductor Mission (ISM) 2.0 to produce equipment and materials, design full-stack Indian IP, and fortify supply chains in the futuristic areas of development.
The industry in general has hailed the momentum to the capital expenditure committed in the budget. “the impetus given to infrastructure will support growth, crowd in private investment, reduce logistics cost and generate employment. Investments in dedicated freight corridors, national inland waterways and coastal cargo promotion scheme signal a decisive push towards a more efficient, multi-model logistics framework,” Anant Goenka, President FICCI, said in a statement.
Recognising MSMEs as a vital engine of growth, the Finance Minister has proposed a plan to help the sector to grow as ‘champions’ as she introduced a dedicated Rs 10,000 crore SME Growth Fund.
For the labour-intensive Textile Sector, which has been hit hard by the US tariffs, has been given relief by way of an Integrated Programme. This includes the National Fibre Scheme for self-reliance in natural fibres such as silk, wool and jute, man-made fibres, and new-age fibres and Textile Expansion and Employment Scheme to modernise traditional clusters with capital support for machinery, technology upgradation and common testing and certification centres among others.
Rationalizing the customs duty structure for goods imported for personal use, the Minister proposed to reduce the tariff rate on all dutiable goods imported for personal use from 20 per cent to 10 per cent.
The government has provided relief to patients, particularly those suffering from cancer and proposed to exempt basic customs duty on 17 drugs or medicines. It has also proposed to add 7 more rare diseases for the purposes of exempting import duties on personal imports of drugs, medicines and Food for Special Medical Purposes (FSMP) used in their treatment.
The proposal for “course correction” in the F & O segment in the capital market and generating additional revenues by way of increasing the Securities Transaction Tax (STT) to 0.05% from present 0.02%, did not go well with the market.
The BSE Sensex crashed by over 1,546 points while the 50-share index Nifty nosedived by near 500-points.
