Union Budget 2026 Unveils Major Financial Reforms and Doubles Overseas Investment Limit
Finance Minister Nirmala Sitharaman presented the Union Budget 2026 in Parliament, outlining a comprehensive strategy to bolster India's banking system and deepen financial markets. Among the key announcements, she revealed that the individual investment limit for overseas residents in Indian listed companies has been doubled to 10%, a significant move aimed at attracting global capital and enhancing market liquidity.
Strengthening Banking and Financial Infrastructure
Sitharaman emphasized structural reforms in banks and Non-Banking Financial Companies (NBFCs) to improve efficiency and stability. She proposed setting up a high-level panel on "Banking for Viksit Bharat" to review the sector and align it with India's next phase of growth. This initiative is expected to drive innovation and competitiveness in the financial services industry.
Additionally, the budget includes measures to expand corporate and municipal bond markets, which will provide more funding options for businesses and local governments. Small businesses are set to benefit from improved access to credit, supporting entrepreneurship and economic development across the country.
Reforms in Public Sector NBFCs and Global Capital Attraction
To enhance efficiency in public sector NBFCs, Sitharaman announced the restructuring of Power Finance Corporation and REC Ltd. This move is designed to streamline operations and boost their role in financing infrastructure projects.
In a bid to attract more foreign investment, the Finance Minister proposed easing foreign investment norms and introducing a market-making framework for corporate bonds. The doubling of the ownership limit for foreign individual investors to 10% is a pivotal step in this direction, encouraging greater participation from overseas residents in India's equity markets.
These measures collectively aim to position India as a more attractive destination for global capital, fostering economic growth and financial inclusion in line with the government's vision for a developed nation.
