Budget 2026 Unveils Major Price Adjustments: Relief for Patients and Producers, Higher Levies on Sin Goods
Finance Minister Nirmala Sitharaman presented the highly anticipated Union Budget for the fiscal year 2026–27 on Sunday, February 1, marking her ninth consecutive budget presentation. The budget speech, delivered in Parliament, emphasized a strategic focus on ramping up capital expenditure and providing targeted incentives to key sectors of the economy to accelerate India's growth trajectory.
In her address, FM Sitharaman outlined three core 'kartavyas' or duties aimed at expediting the nation's economic progress. These duties encompass a broad vision for sustainable development, industrial strengthening, and public welfare. Among the myriad of announcements concerning taxation and sectoral policies, one of the most closely watched aspects by the common citizen was the direct impact on the prices of everyday goods and services.
Significant Price Reductions Introduced to Support Domestic Industries and Healthcare
The government has proactively introduced several measures in its budget proposals designed to lower costs for consumers and bolster domestic manufacturing. A key focus area is providing relief in healthcare and essential goods.
Major items that have become cheaper include:
- Healthcare and Medicines: Significant customs duty exemptions and policy support have been extended to make 17 critical drugs and medicines for cancer patients more affordable. Additionally, drugs, medicines, and Food for Special Medical Purposes (FSMP) for seven rare diseases will see reduced costs, offering substantial relief to affected families.
- Consumer Goods and Apparel: Leather items, particularly footwear, and textile garments are set to become cheaper due to enhanced policy support and duty adjustments aimed at boosting the domestic leather and textile industries.
- Food and Energy: Seafood products will benefit from duty-free import provisions, potentially lowering prices. In the energy sector, biogas-blended CNG and critical minerals for renewable energy projects have received concessions to promote cleaner fuel adoption and reduce dependency on imports.
- Technology and Education: Lithium-ion cells for batteries, solar glass, and aircraft manufacturing components are among the items that will cost less, supporting India's push towards self-reliance in advanced manufacturing. Furthermore, costs related to foreign education and overseas tour packages have been eased to make international exposure more accessible.
- Household Appliances: Microwave ovens are also listed among the items that will see a price reduction, providing some relief to household budgets.
Increased Duties on Tobacco, Alcohol, and Certain Raw Materials
Conversely, the budget proposes higher levies on specific items, primarily targeting sin goods and certain industrial inputs to align with health and fiscal objectives.
Items that have become more expensive include:
- Alcohol and Tobacco Products: The tax collected at source (TCS) rate on alcohol meant for human consumption has been increased from 2% to 1%, effectively raising its cost. Additionally, the rates for chewing tobacco and jarda scented tobacco have been significantly hiked to 60%, a move aimed at discouraging consumption for public health reasons.
- Industrial and Energy Components: Components for nuclear power projects, along with key minerals such as iron ore and coal, will see increased costs. This adjustment is part of broader fiscal measures impacting the mining and energy sectors.
- Cigarettes: Already subject to high taxation, cigarettes will become even more expensive, continuing the government's efforts to curb smoking.
It is important to note that these price changes are based on the budget proposals presented in Parliament. The final approval from both the Lok Sabha and the Rajya Sabha is pending, and modifications may occur during the legislative process.
The Budget 2026-27, therefore, presents a mixed bag for consumers, with targeted relief in essential areas like healthcare and domestic manufacturing, balanced by increased duties on non-essential and harmful products. These measures reflect the government's dual focus on fostering economic growth while addressing public health and fiscal sustainability.
