Union Budget 2026: FM Nirmala Sitharaman Unveils Key Economic Measures
Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2026-27 on February 1, 2026, outlining a comprehensive economic roadmap with several significant announcements aimed at boosting India's digital infrastructure, manufacturing capabilities, and national security.
Major Tax and Infrastructure Initiatives
One of the standout announcements was the introduction of a tax holiday for data centers in India, which will remain in effect until 2047. This move is designed to attract substantial investments in the country's digital infrastructure and position India as a global data hub.
Additionally, the government launched Chip Manufacturing Scheme 2.0, an enhanced version of the existing semiconductor production initiative. While details about its implementation beyond fabrication units remain under discussion, this scheme aims to strengthen India's position in the critical electronics manufacturing sector.
Defence and Fiscal Allocations
The defence sector received a substantial boost with allocation jumping to Rs 7.84 lakh crore, focusing particularly on capital expenditure and aerospace development. This increase underscores the government's commitment to modernizing India's defence capabilities.
In another significant fiscal measure, the grant for rural local bodies saw a dramatic increase to Rs 4.35 lakh crore as per the 16th Finance Commission report, representing an almost doubling of funds compared to previous allocations to strengthen grassroots governance.
Economic Context and Reactions
The budget presentation comes at a crucial time as the Bharatiya Janata Party prepares for elections in five states, though observers noted the absence of any overt political messaging in the financial document. Key takeaways from the budget include:
- A strong push for job creation across various sectors
- Measures to ease distress caused by US tariffs on Indian exports
- Initiatives to bolster fund flows into the economy
- Four specific strategies to address the strain of US tariffs on Indian industries
Market reactions were mixed with gold prices crashing to Rs 1.36 lakh on MCX during the budget presentation, while silver witnessed a 19% plunge. The budget also introduced changes to income tax slabs making foreign travel more affordable while increasing costs for futures and options trading.
Additional Policy Announcements
Other notable measures included the introduction of the Biopharma SHAKTI scheme to boost pharmaceutical research and development, along with the commencement of RRB Group D recruitment for Level-1 posts with detailed vacancy and eligibility information released.
The education budget received focused attention as part of the broader Union Budget 2026 framework, though specific allocation figures were not highlighted in the initial announcements.
