Finance Minister Nirmala Sitharaman unveiled the Union Budget for the fiscal year 2026-27 on Sunday, February 1, 2026, at 11 am in New Delhi. This significant announcement has sparked widespread public interest, with many citizens eagerly anticipating potential relief in their daily expenses and concerns over items that might become more expensive.
Economic Survey 2025-26 Highlights
Prior to the Budget presentation, the Economic Survey for 2025-26 was tabled in Parliament on Thursday. Prime Minister Narendra Modi praised the survey, emphasizing its reflection of India's robust macroeconomic fundamentals and sustained growth momentum. The survey projects the country's economic growth to range between 6.8 and 7.2 percent in the upcoming financial year. It also highlights a strong focus on inclusive development, targeting key areas such as farmers, MSMEs, youth employment, and social welfare initiatives.
Background on GST Reforms
The Budget announcement follows a major GST reform approved by the GST Council four months earlier. This reform introduced a simplified two-tier rate structure of 5 percent and 18 percent, which was implemented on September 22. Under this new system, daily essentials like hair oil, soaps, bicycles, life-saving cancer drugs, food items, and insurance policies have become more affordable. Conversely, luxury goods, automobile parts, vehicles, tobacco products, and sugary drinks now face higher taxation.
What Gets Cheaper in Union Budget 2026?
In her Budget speech, Finance Minister Nirmala Sitharaman announced several measures aimed at reducing costs for consumers and boosting specific sectors. Key highlights include:
- Customs Duty Cuts: Components used in manufacturing civilian, training, and other aircraft, as well as microwave parts, essential drugs, and certain imported goods, will see lower customs duties.
- Exemptions on Medicines: The government has proposed to exempt basic customs duty on 17 critical drugs and medicines, including those essential for cancer patients, making healthcare more accessible.
- Promotion of Exports: Duty-free imports of specified inputs have been proposed to encourage India's exports in the leather and synthetic footwear industries, potentially lowering production costs and enhancing global competitiveness.
What Gets Costlier in Union Budget 2026?
While some items are set to become cheaper, the Budget also includes measures that may increase prices for certain products. Notable changes are:
- Tax Exemption Removals: Starting February 2, 2026, tax exemptions on coffee roasting, brewing, or vending machines used in coffee processing will be eliminated, likely raising costs for coffee manufacturers.
- Fertilizer Price Hikes: The removal of fee exemptions on imports of Ammonium phosphate and Ammonium nitro-phosphate, compounds crucial for producing manure and complex fertilizers, could make some fertilizers more expensive.
- Entertainment Equipment Costs: Exemptions on imports of television equipment, cameras, and other film-making gear will be phased out beginning April 1, 2026. Additionally, imported photographic, filming, and sound-recording equipment may also see price increases, impacting the media and entertainment industries.
Overall, the Union Budget 2026-27 aims to balance economic growth with social welfare, leveraging tax reforms to stimulate key sectors while addressing inflationary pressures in specific areas.
