Budget 2026: Full text of Nirmala Sitharaman's Union Budget speech here

FInance regime minister Nirmala Sitharaman presented the unification Budget in Parliament on lord's day, outlining the government’s economical priorities, reform agenda and fiscal roadmap amid a challenging global environment.Follow for live updates.Here is the full budget speech:Hon’ble Speaker,On the sacred occasion of Magha Purnima and the birthanniversary of Guru Ravidas, I present the Budget for the year2026-2027.Introduction1. Since we assumed office 12 years ago, India’s economictrajectory has been marked by stability, fiscal discipline, sustainedgrowth and moderate inflation. This is the result of conscious choices wehave made, even in times of heightened uncertainty and disruption. OurGovernment, led by Hon’ble Prime Minister Modi, has decisively andconsistently chosen action over ambivalence, reform over rhetoric andpeople over populism.2. We have pursued far reaching structural reforms,fiscal prudence and monetary stability whilstmaintaining a strong thrust on public investment.Keeping atmanirbharta as a lodestar, we have built domesticmanufacturing capacity, energy security and reduced critical importdependencies. Simultaneously, we have ensured that citizens benefitfrom every action of the Government, undertaking reforms to supportemployment generation, agricultural productivity, household purchasingpower and universal services to people.These measures have delivered a high growth rate of around 7% andhelped us make substantial strides in poverty reduction andimprovement in the lives of our people.3. Today, we face an external environment in which trade andmultilateralism are imperilled and access to resources and supply chainsare disrupted. New technologies are transforming production systemswhile sharply increasing demands on water, energy and critical minerals.4. India will continue to take confident steps towards Viksit Bharat,balancing ambition with inclusion. As a growing economy withexpanding trade and capital needs, India must also remain deeplyintegrated with global markets, exporting more and attracting stablelong-term investment.Part A5. As I begin Part A, I want to express my gratitude to the people forstanding firmly with us as we forge our way together towards becomingone of the largest economies of the world.6. Our aim is to transform aspiration into achievement andpotential into performance, as we ensure that the dividends of growthreach every farmer, the scheduled caste, the scheduled tribes, thenomads, the youth, the poor and the women.7. In the Viksit Bharat Young Leaders Dialogue 2026, severalinnovative ideas were shared with our Prime Minister, which haveinspired many of the proposals, making this a unique Yuva Shakti-drivenBudget.8. Our Government’s ‘Sankalp’ is to focus on our poor,underprivileged and the disadvantaged. To deliver on this Sankalp, andgiven that this is the first Budget prepared in Kartavya Bhawan, we areinspired by 3 kartavya:9. Our first kartavya is to accelerate and sustain economic growth,by enhancing productivity and competitiveness, and building resilienceto volatile global dynamics.10. Our second kartavya is to fulfil aspirations of our people andbuild their capacity, making them strong partners in India’s path toprosperity.11. Our third kartavya, aligned with our vision of Sabka Sath, SabkaVikas, is to ensure that every family, community, region and sector hasaccess to resources, amenities and opportunities for meaningfulparticipation.12. This threefold approach requires a supportive ecosystem. Thefirst requirement is to sustain the momentum of structural reforms—continuous, adaptive, and forward-looking. Second, a robust andresilient financial sector is central to mobilising savings, allocatingcapital efficiently and managing risks. Third, cutting-edge technologies,including AI applications, can serve as force multipliers for bettergovernance.Reform Express13. Our Government has undertaken comprehensive economicreforms towards creating employment, boosting productivity andaccelerating growth. After the Prime Minister’s announcement onIndependence Day in 2025, over 350 reforms have been rolled out.These include GST simplification, notification of Labour Codes, andrationalisation of mandatory Quality Control Orders. High LevelCommittees have been formed and in parallel, the Central Governmentis working with the State Governments on deregulation and reducingcompliance requirements.14. The Reform Express is well on its way and will maintain itsmomentum to help us fulfil our kartavya.I now move to the specific proposals.15. Under our first kartavya to accelerate and sustain economicgrowth, I propose interventions in six areas: i) Scaling up manufacturingin 7 strategic and frontier sectors; ii) Rejuvenating legacy industrialsectors; iii) Creating “Champion MSMEs”; iv) Delivering a powerful pushto Infrastructure; v) Ensuring long-term energy security and stability;and vi) Developing City Economic Regions.Scaling up manufacturing in 7 strategic and frontier sectors:16. Biopharma SHAKTI (Strategy for Healthcare Advancementthrough Knowledge, Technology and Innovation) – India’s diseaseburden is observed to be shifting towards non-communicable diseases,like diabetes, cancer and autoimmune disorders. Biologic medicines arekey to longevity and quality of life at affordable costs. To develop Indiaas a global Biopharma manufacturing hub, I propose the BiopharmaSHAKTI with an outlay of ₹ 10,000 crores over the next 5 years. This willbuild the ecosystem for domestic production of biologics andbiosimilars. The Strategy will include a Biopharma-focused network with3 new National Institutes of Pharmaceutical Education and Research(NIPER) and upgrading 7 existing ones. It will also create a network ofover 1000 accredited India Clinical Trials sites. We propose to strengthenthe Central Drugs Standard Control Organisation to meet globalstandards and approval timeframes through a dedicated scientificreview cadre and specialists.17. India Semiconductor Mission (ISM) 1.0 expanded India’ssemiconductor sector capabilities. Building on this,we will launch ISM 2.0 to produce equipment and materials, designfull-stack Indian IP, and fortify supply chains. We will also focus onindustry-led research and training centres to develop technology andskilled workforce.18. The Electronics Components Manufacturing Scheme, launchedin April 2025 with an outlay of ₹22,919 crore, already has investmentcommitments at double the target. We propose to increase the outlay to ₹40,000 crore to capitalise on the momentum.19. A Scheme for Rare Earth Permanent Magnets was launched inNovember 2025. We now propose to support the mineral-rich States ofOdisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicatedRare Earth Corridors to promote mining, processing, research andmanufacturing.20. To enhance domestic chemical production and reduceimport-dependency, we will launch a Scheme to support States inestablishing 3 dedicated Chemical Parks, through challenge route, on acluster-based plug-and-play model.21. Strong capital goods capability is a determinant of productivityand quality across different sectors. Towards building this capacity, Ipropose the following:(a) Hi-Tech Tool Rooms will be established by CPSEs at 2locations as digitally enabled automated service bureaus thatlocally design, test, and manufacture high-precisioncomponents at scale and at lower cost.(b) A Scheme for Enhancement of Construction andInfrastructure Equipment (CIE) will be introduced tostrengthen domestic manufacturing of high-value andtechnologically-advanced CIE. This can range from lifts in amulti-story apartment, fire-fighting equipment, large andsmall, to tunnel-boring equipment for building metros andhigh-altitude roads.(c) I also propose a Scheme for Container Manufacturing tocreate a globally competitive container manufacturingecosystem, with a budgetary allocation of ₹10,000 crore overa 5 year period.22. For the labour-intensive Textile Sector, I propose an IntegratedProgramme with 5 sub-parts:(a) The National Fibre Scheme for self-reliancein natural fibres such as silk, wool and jute,man-made fibres, and new-age fibres;(b) Textile Expansion and Employment Scheme to modernisetraditional clusters with capital support for machinery,technology upgradation and common testing andcertification centres;(c) A National Handloom and Handicraft programme tointegrate and strengthen existing schemes and ensuretargeted support for weavers and artisans;7(d) Tex-Eco Initiative to promote globally competitive andsustainable textiles and apparels;(e) Samarth 2.0 to modernize and upgrade the textile skillingecosystem through collaboration with industry andacademic institutions.23. Further, I propose to set up Mega Textile Parks in challengemode. They can also focus on bringing value addition to technicaltextiles.24. I propose to launch the Mahatma Gandhi Gram Swaraj initiativeto strengthen khadi, handloom and handicrafts. This will help in globalmarket linkage and branding. It will streamline and support training,skilling, quality of process and production. This will benefit our weavers,village industries, One - District – One - Product initiative and ruralyouth.25. India has the potential to emerge as a global hub for high quality,affordable sports goods. I propose a dedicated initiative for sports goodsthat will promote manufacturing, research and innovation in equipmentdesign as well as material sciences.Rejuvenation of Legacy Industrial Clusters26. I propose to introduce a Scheme to revive 200 legacy industrialclusters to improve their cost competitiveness and efficiency throughinfrastructure and technology upgradation.Creating “Champion SMEs” and supporting micro enterprises:27. Recognising MSMEs as a vital engine of growth, I propose athree-pronged approach to help them grow as ‘Champions’:8Equity Support28. I propose to introduce a dedicated ₹10,000 crore SME GrowthFund, to create future Champions, incentivizing enterprises based onselect criteria.29. I also propose to top up the Self-Reliant India Fund set up in2021, with ₹2,000 crore to continue support to micro enterprises andmaintain their access to risk capital.Liquidity Support30. With TReDS, more than ₹7 lakh crore has been made available toMSMEs. To leverage its full potential, I propose 4 measures: (i) mandateTReDS as the transaction settlement platform for all purchases fromMSMEs by CPSEs, serving as a benchmark for other corporates; (ii)introduce a credit guarantee support mechanism through CGTMSE forinvoice discounting on TReDS platform; (iii) link GeM with TReDS forsharing information with financiers about government purchases fromMSMEs, encouraging cheaper and quicker financing; (iv) introduceTReDS receivables as asset-backed securities, helping develop asecondary market, enhancing liquidity and settlement of transactions.Professional Support31. Government will facilitate Professional Institutions such as ICAI,ICSI, ICMAI to design short-term, modular courses and practical tools todevelop a cadre of ‘Corporate Mitras’, especially in Tier-II and Tier-IIItowns. These accredited para-professionals will help MSMEs meetcompliance requirements at affordable costs.Infrastructure32. During this past decade our Government has undertaken severalinitiatives for large-scale enhancement of public infrastructure includingthrough new financing instruments such as Infrastructure InvestmentTrusts (InVITs) and Real Estate Investment Trusts (REITs) and institutionslike NIIF and NABFID. We shall continue to focus on developinginfrastructure in cities with over 5 lakh population (Tier II and Tier III),which have expanded to become growth centres.33. Public capex has increased manifold from ₹2 lakh crore inFY2014-15 to an allocation of ₹11.2 lakh crore inBE 2025-26. In FY2026-27, I propose to increase it to ₹12.2 lakh crore tocontinue the momentum.34. To strengthen the confidence of private developers regardingrisks during infrastructure development and construction phase, Ipropose to set up an Infrastructure Risk Guarantee Fund to provideprudently calibrated partial credit guarantees to lenders.35. Over the years, REITs have emerged as a successful instrumentfor asset monetisation. I propose to accelerate recycling of significantreal estate assets of CPSEs through the setting up of dedicated REITs.36. To promote environmentally sustainable movement of cargo, Ipropose to: a) Establish new Dedicated Freight Corridors connectingDankuni in the East, to Surat in the West; b) operationalise 20 newNational Waterways (NW) over next 5 years, starting with NW-5 inOdisha to connect mineral rich areas of Talcher and Angul and industrialcentres like Kalinga Nagar to the Ports of Paradeep and Dhamra. TrainingInstitutes will be set up as Regional Centres of Excellence fordevelopment of the required manpower. This will benefit youth in theentire stretch of the waterways to train and acquire skills.Further, a ship repair ecosystem catering to inland waterways will alsobe set up at Varanasi and Patna; c) launch a Coastal Cargo Promotion10Scheme for incentivising a modal shift from rail and road, to increase theshare of inland waterways and coastal shipping from 6 % to 12 % by2047.37. To enhance last-mile and remote connectivity, and promotetourism, I propose to give incentives to indigenize manufacturing ofseaplanes. A Seaplane VGF Scheme will be also be introduced to providesupport for operations.Carbon Capture Utilization and Storage (CCUS)38. Aligning with the roadmap launched in December 2025, CCUStechnologies at scale will achieve higher readiness levels in end-useapplications across five industrial sectors, including, power, steel,cement, refineries and chemicals. An outlay of ₹20,000 crore isproposed over the next 5 years.City Economic Regions39. Cities are India’s engines of growth, innovation, andopportunities. We shall now focus on Tier II and Tier III cities, and eventemple-towns, which need modern infrastructure and basic amenities.This Budget aims to further amplify the potential of cities to deliver theeconomic power of agglomerations by mapping city economic regions(CER), based on their specific growth drivers. An allocation of ₹ 5000crore per CER over 5 years is proposed for implementing their plansthrough a challenge mode with a reform-cum-results based financingmechanism.40. In order to promote environmentally sustainable passengersystems, we will develop seven High-Speed Rail corridors betweencities as ‘growth connectors’, namely i) Mumbai-Pune, ii)Pune-Hyderabad, iii) Hyderabad-Bengaluru, iv) Hyderabad-Chennai, v)Chennai-Bengaluru, vi) Delhi-Varanasi, vii) Varanasi-Siliguri.11Financial Sector41. The Indian banking sector today is characterised by strongbalance sheets, historic highs in profitability, improved asset quality andcoverage exceeding 98% of villages in the country. At this juncture, weare well-placed to futuristically evaluate the measures needed tocontinue on the path of reform-led growth of this sector.42. I propose setting up a “High Level Committee on Banking forViksit Bharat”, to comprehensively review the sector and align it withIndia’s next phase of growth, while safeguarding financial stability,inclusion and consumer protection.43. The vision for NBFCs for Viksit Bharat has been outlined withclear targets for credit disbursement and technology adoption. In orderto achieve scale and improve efficiency in the Public Sector NBFCs, as afirst step, it is proposed to restructure the Power Finance Corporationand Rural Electrification Corporation.44. I propose a comprehensive review of the Foreign ExchangeManagement (Non-debt Instruments) Rules to create a morecontemporary, user-friendly framework for foreign investments,consistent with India’s evolving economic priorities.Corporate Bond Market45. I propose to introduce a market making framework with suitableaccess to funds and derivatives on corporate bond indices. I alsopropose to introduce total return swaps on corporate bonds.Municipal Bonds46. To encourage the issuance of municipal bonds of higher value bylarge cities, I propose an incentive of ₹100 crore for a single bondissuance of more than ₹1000 crore. The current scheme under AMRUT12which incentivises issuances up to ₹200 crore, will also continue tosupport smaller and medium towns.Ease of Doing Business47. Individual Persons Resident Outside India (PROI) will bepermitted to invest in equity instruments of listed Indian companiesthrough the Portfolio Investment Scheme. It is also proposed to increasethe investment limit for an individual PROI under this scheme from 5%to 10%, with an overall investment limit for allindividual PROIs to 24%, from the current 10%.Emerging technologies, including AI48. 21st Century is technology driven. Adoption of technology is forthe benefit of all people - farmers in the field, women in STEM, youthkeen to upskill and Divyangjan to access newer opportunities. TheGovernment has taken several steps to support new technologiesthrough AI Mission, National Quantum Mission, Anusandhan NationalResearch Fund, and Research, Development and Innovation Fund.49. Our second kartavya is to fulfil aspirations and build capacity.Close to 25 crore individuals have come out of multidimensional povertythrough a decade of our Government’s sustained and reform-orientedefforts.50. Our Government has therefore decided to place a renewedemphasis on the Services Sector to provide a pathway to fulfillingaspirations of a youthful India, with the following measures.High-Powered ‘Education to Employment and Enterprise’ StandingCommittee51. I propose to set up a High-Powered ‘Education to Employmentand Enterprise’ Standing Committee to recommend measures that focuson the Services Sector as a core driver of Viksit Bharat. This will make us13a global leader in services, with a 10% global share by 2047. TheCommittee will prioritise areas to optimise the potential for growth,employment and exports. They will also assess the impact of emergingtechnologies, including AI, on jobs and skill requirements and proposemeasures thereof.Creation of Professionals for Viksit Bharat52. To create a new range of skilled career pathways for our youth, Ipropose interventions in the following sectors:Health53. Existing institutions for Allied Health Professionals (AHPs) willbe upgraded and new AHP Institutions established in private andGovernment sectors. This will cover 10 selected disciplines, includingoptometry, radiology, anesthesia, OT Technology, Applied Psychologyand Behavioural Health and add 100,000 AHPs over thenext 5 years.54. A strong Care Ecosystem, covering geriatric and allied careservices will be built. A variety of NSQF-aligned programmes will bedeveloped to train multiskilled caregivers combining core care and alliedskills, such as, wellness, yoga and operation of medical and assistivedevices. In the coming year, 1.5 lakh caregivers will be trained.Hubs for Medical Value Tourism55. To promote India as a hub for medical tourismservices, I propose to launch a Scheme to support States in establishingfive Regional Medical Hubs, in partnership with the private sector.These Hubs will serve as integrated healthcare complexes that combinemedical, educational and research facilities. They will have AYUSHCentres, Medical Value Tourism Facilitation Centres and infrastructurefor diagnostics, post-care and rehabilitation. These Hubs will provide14diverse job opportunities for health professionals including doctors andAHPs.AYUSH56. Ancient Indian yoga, already respected in several parts of theworld, was given mass global recognition when Hon’ble PM took it tothe UN. Post-COVID, Ayurveda gained a similar global acceptance andrecognition.57. Exporting quality Ayurvedic products helps farmers who growthe herbs and the youth who process the products. To meet growingglobal demand, a few more steps are being taken.58. I propose to (i) set up 3 new All India Institutes of Ayurveda; (ii)upgrade AYUSH pharmacies and Drug Testing Labs for higher standardsof certification ecosystem, and make available more skilled personnel;(iii) upgrade the WHO Global Traditional Medicine Centre in Jamnagar tobolster evidence-based research, training and awareness for traditionalmedicine.Animal Husbandry59. Livestock contributes close to 16% of farm income, including ofpoor and marginal households. To scale up availability of veterinaryprofessionals by more than 20,000, I propose to roll out a loan-linkedcapital subsidy support scheme for establishment of veterinary andpara-vet colleges, veterinary hospitals, diagnostic laboratories andbreeding facilities in the private sector. Collaboration between Indianand foreign institutions will also be facilitated.Orange Economy60. India’s Animation, Visual Effects, Gaming and Comics (AVGC)sector is a growing industry, projected to require 2 million professionalsby 2030. I propose to support the Indian Institute of Creative15Technologies, Mumbai in setting up AVGC Content Creator Labsin 15,000 secondary schools and 500 colleges.Design61. The Indian design industry is expanding rapidly and yet there is ashortage of Indian designers. I propose to establish through challengeroute, a new National Institute of Design to boost design education anddevelopment in the eastern region of India.Education62. Our Government will support States, through challenge route, increating 5 University Townships in the vicinity of major industrial andlogistic corridors. These planned academic zones will host multipleuniversities, colleges, research institutions, skill centres and residentialcomplexes.63. In Higher Education STEM institutions, prolonged hours of studyand laboratory work pose some challenges for girl students. ThroughVGF/capital support, 1 girls’ hostel will be established in every district.64. To promote Astrophysics and Astronomy via immersiveexperiences, 4 Telescope Infrastructure facilities will be set up orupgraded - the National Large Solar Telescope, the National LargeOptical-infrared Telescope, the Himalayan Chandra Telescope and theCOSMOS-2 Planetarium.Tourism65. The Tourism sector has the potential to play a large role inemployment generation, forex earnings and expanding the localeconomy.1666. I propose to set up a National Institute of Hospitality byupgrading the existing National Council for Hotel Management andCatering Technology. It will function as a bridge between academia,industry and the Government.67. I also propose a pilot scheme for upskilling 10,000 guides in 20iconic tourist sites through a standardized,high-quality 12-week training course in hybrid mode, in collaborationwith an Indian Institute of Management.68. A National Destination Digital Knowledge Grid will beestablished to digitally document all places of significance—cultural,spiritual and heritage. This initiative will create a new ecosystem of jobsfor local researchers, historians, content creators and technologypartners.69. India has the potential and opportunity to offer world-classtrekking and hiking experience. We will develop ecologically sustainable(i) Mountain trails in Himachal Pradesh, Uttarakhand and Jammu andKashmir; Araku Valley in the Eastern Ghats and Podhigai Malai in theWestern Ghats. (ii) Turtle Trails along key nesting sites in the coastalareas of Odisha, Karnataka and Kerala; and (iii) Bird watching trails alongthe Pulikat lake in Andhra Pradesh and Tamil Nadu.70. Under the visionary leadership of Honorable Prime Minister, weestablished the International Big Cat Alliance in 2024. This year, India ishosting the first ever Global Big Cat Summit, where heads ofgovernments and ministers from 95 range countries will deliberate oncollective strategies for conservation.Heritage and Culture Tourism1771. I propose to develop 15 archeological sites including Lothal,Dholavira, Rakhigarhi, Adichanallur, Sarnath, Hastinapur, and Leh Palaceinto vibrant, experiential cultural destinations. Excavated landscapes willbe opened to the public through curated walkways.Immersive storytelling skills and technologies will be introduced to helpconservation labs, interpretation centres, and guides.Sports72. The Sports Sector provides multiple means of employment,skilling and job opportunities. Taking forward the systematic nurturing ofsports talent which is set in motion through the Khelo Indiaprogramme, I propose to launch a Khelo India Mission to transform theSports sector over the next decade.73. The Mission will facilitate: a) An integrated talent developmentpathway, supported by training centres (foundational, intermediate andelite levels); b) systematic development of coaches and support staff; c)integration of sports science and technology; d) competitions andleagues to promote sports culture and provide platforms; and, e)development of sports infrastructure for training and competition.74. Our third kartavya aligns with our vision of Sabka Sath, SabkaVikas towards a Viksit Bharat.75. This requires targeted efforts for a) Increasing farmer incomesthrough productivity enhancement and entrepreneurship, with specialattention to small and marginal farmers; b) Empowering Divyangjanthrough access to livelihood opportunities, training andhigh-quality assistive devices; c) Empowering the vulnerable to accessmental health and trauma care; d) Focus on the Purvodaya States and18the North-East Region to accelerate development and employmentopportunities.Increasing Farmer Incomes76. Fisheries: We will undertake initiatives (i) for integrateddevelopment of 500 reservoirs and Amrit Sarovars(ii) strengthen the fisheries value chain in coastal areas and enablemarket linkages involving start-ups and women-led groups together withFish Farmers Producer Organisations.77. Animal Husbandry: To provide quality employmentopportunities in rural and peri-urban areas, we will support the AnimalHusbandry Sector in entrepreneurship development through: (a) aCredit-Linked Subsidy Programme (b) scaling-up and modernisation oflivestock enterprises (c) enhance creation of livestock, dairy andpoultry-focused integrated-value chains and (d) encourage creation ofLivestock Farmer Producers Organisations.78. High Value Agriculture: To diversify farm outputs, increaseproductivity, enhance farmers’ incomes, and create new employmentopportunities, we will support high value crops such as coconut,sandalwood, cocoa and cashew in our coastal areas. Agar trees in NorthEast and nuts such as, almonds, walnuts and pine nuts in our hillyregions will also be supported.79. India is the world’s largest producer of coconuts.About 30 million people, including nearly 10 million farmers, depend oncoconuts for their livelihood. To further enhance competitiveness incoconut production, I propose a Coconut Promotion Scheme to increase19production and enhance productivity through various interventionsincluding replacing old and non-productive trees with newsaplings/plants/varieties in major coconut growing States.80. A dedicated programme is proposed for Indian cashew and cocoato make India self-reliant in raw cashew and cocoa production andprocessing, enhance export competitiveness and transform IndianCashew and Indian Cocoa into premium global brands by 2030.81. Sandalwood is closely linked to India’s social and culturalheritage. Our Government will partner with State Governments topromote focused cultivation and post-harvest processing to restore theglory of the Indian Sandalwood ecosystem.82. To rejuvenate old, low-yielding orchards and expandhigh-density cultivation of walnuts, almonds and pine nuts, we willsupport a dedicated programme to enhance farmer incomes and inbringing value addition by engaging youth.Bharat-VISTAAR (Virtually Integrated System to Access AgriculturalResources)83. I propose to launch Bharat-VISTAAR—a multilingual AI tool thatshall integrate the AgriStack portals and the ICAR package on agriculturalpractices with AI systems. This will enhance farm productivity, enablebetter decisions for farmers and reduce risk by providing customisedadvisory support.SHE-Marts for Rural Women-led Enterprises2084. Building on the success of the Lakhpati Didi Programme, Ipropose to help women take the next step fromcredit-led livelihoods to being owners of enterprises.Self-Help Entrepreneur (SHE) Marts will be set up as community-ownedretail outlets within the cluster level federations through enhanced andinnovative financing instruments.Empowering Divyangjan85. Divyangjan Kaushal Yojana: IT, AVGC sectors, Hospitality andFood and Beverages sectors offer task-oriented and process-driven roles,which are suitable for Divyangjans. We will ensure dignified livelihoodopportunities through industry-relevant and customized training specificto each divyang group.86. Divyang Sahara Yojana: Timely access to high-quality assistivedevices for all eligible Divyangjans is a fundamental need. I propose to (i)support the Artificial Limbs Manufacturing Corporation of India(ALIMCO) to scale up production of assistive devices, invest in R&D andAI integration, (ii) strengthen PM Divyasha Kendras and support settingup of Assistive Technology Marts as modern retail-style centres whereDivyangjans and senior citizens can see, try and purchase assistiveproducts.Reaffirming our commitment to Mental Health and Trauma Care87. There are no national institutes for mental healthcare in northIndia. We will therefore set up a NIMHANS-2 and also upgrade NationalMental Health Institutes in Ranchi and Tezpur as Regional ApexInstitutions.2188. Emergencies expose families, particularly the poor andvulnerable, to unexpected expenditure. We will strengthen and increasethese capacities by 50% in District Hospitals by establishing Emergencyand Trauma Care Centres.Focus on the Purvodaya States and the North-Eastern Region89. Purvodaya: I propose the development of an integrated EastCoast Industrial Corridor with a well-connected node at Durgapur,creation of 5 tourism destinations in the 5 Purvodaya States, and theprovision of 4,000 e-buses.90. Buddhist Sites in North-Eastern Region: TheNorth-Eastern Region is a civilizational confluence of Theravada andMahayana/Vajrayana traditions. I propose to launch a Scheme forDevelopment of Buddhist Circuits in Arunachal Pradesh, Sikkim, Assam,Manipur, Mizoram and Tripura. The Scheme will cover preservation oftemples and monasteries, pilgrimage interpretation centers,connectivity and pilgrim amenities.16th Finance Commission91. On 17th November 2025, the 16th Finance Commission submittedits report to the President. As mandated under Article 281 of theConstitution, the Government is to lay the Report along with theExplanatory Memorandum on the Action Taken Report on therecommendations of the Commission in Parliament. The Governmenthas accepted the recommendation of the Commission to retain thevertical share of devolution at 41%. As recommended by theCommission, I have provided ₹1.4 lakh crore to the States for the FY222026-27 as Finance Commission Grants. These include Rural and UrbanLocal Body and Disaster Management Grants.Fiscal Consolidation92. Government has been delivering on our fiscal commitmentsconsistently without compromising on social needs. To strive towardsaccepted standards of fiscal management, in Budget 2025-26, I hadindicated that the Central Government would target reaching adebt-to-GDP ratio of 50±1 percent by 2030-31.93. In line with this, the debt-to-GDP ratio is estimated to be 55.6percent of GDP in BE 2026-27, compared to 56.1 percent of GDP in RE2025-26. A declining debt-to-GDP ratio will gradually free up resourcesfor priority sector expenditure by reducing the outgo on interestpayments.94. One of the main operational instruments for debt targeting is thefiscal deficit. I am happy to inform this august House that I have fulfilledmy commitment made in FY 2021-22 to reduce fiscal deficit below 4.5percent of GDP by 2025-26. In RE 2025-26, the fiscal deficit has beenestimated at par with BE of 2025-26 at 4.4 percent of GDP. In line withthe new fiscal prudence path of debt consolidation, the fiscal deficit inBE 2026-27 is estimated to be 4.3 percent of GDP.Revised Estimates 2025-2695. The Revised Estimates of the non-debt receiptsare ₹34 lakh crore of which the Centre’s net tax receiptsare ₹26.7 lakh crore. The Revised Estimate of the total expenditure is23 ₹49.6 lakh crore, of which the capital expenditure is about ₹11 lakh crore.Budget Estimates 2026-2796. Coming to 2026-27, the non-debt receipts and thetotal expenditure are estimated as ₹36.5 lakh croreand ₹53.5 lakh crore respectively. The Centre’s net tax receipts areestimated at ₹28.7 lakh crore.97. To finance the fiscal deficit, the net market borrowings fromdated securities are estimated at ₹11.7 lakh crore. The balance financingis expected to come from small savings and other sources. The grossmarket borrowings are estimated at ₹17.2 lakh crore.I will now move to Part B.24PART BDirect TaxesSpeaker Sir,98. Now I present my proposals on Direct Taxes.New Income Tax Act99. In July 2024, I announced a comprehensive review of the IncomeTax Act, 1961. This was completed in a record time and the Income TaxAct, 2025 will come into effect from 1st April, 2026.100. The simplified Income Tax Rules and Forms will be notifiedshortly, giving adequate time to taxpayers to acquaint themselves withits requirements.101. The forms have been redesigned such that ordinary citizens cancomply without difficulty.Ease of Living102. I propose that any interest awarded by theMotor Accident Claims Tribunal to a natural person will be exempt fromIncome Tax, and any TDS on this account will be done away with.103. I propose to reduce TCS rate on the sale of overseas tour programpackage from the current 5 percentand 20 percent to 2 percent without any stipulation of amount.104. I propose to reduce TCS rate for pursuing education and formedical purposes under the Liberalized Remittance Scheme (LRS) from 5percent to 2 percent.105. Supply of manpower services is proposed to be specificallybrought within the ambit of payment to contractors for the purpose of25TDS to avoid ambiguity. Thus, TDS on these services will be at the rate ofeither 1 percent or 2 percent only.106. I propose a scheme for small taxpayers whereina rule-based automated process will enable obtaining a lower or nildeduction certificate instead of filing an application with the assessingofficer.107. For the ease of taxpayers holding securities in multiplecompanies, I propose to enable depositories to accept Form 15G or Form15H from the investor and provide it directly to various relevantcompanies.108. I propose to extend time available for revising returns from 31stDecember to up to 31st March with the payment of a nominal fee.109. I also propose to stagger the timeline for filing of tax returns.Individuals with ITR 1 and ITR 2 returns will continue to file till 31stJulyand non-audit business cases or trusts are proposed to be allowedtimetill 31st August.110. TDS on the sale of immovable property by anon-resident is proposed to be deducted and deposited through residentbuyer’s PAN based challan instead of requiring TAN.111. To address practical issues of small taxpayers like students, youngprofessionals, tech employees, relocated NRIs, and such others, Ipropose to introduce a one-time 6-month foreign asset disclosurescheme for these taxpayers to disclose income or assets below a certainsize.112. This scheme would be applicable for two categories of taxpayersnamely,26(A) who did not disclose their overseas income or asset and(B) who disclosed their overseas income and/or paid due tax, but couldnot declare the asset acquired.For category (A), the limit of undisclosed income/asset is proposed to beup to 1 crore rupees. They need to pay 30 percent of Fair Market Valueof asset or 30 percent of undisclosed income as tax and 30 percent asadditional income tax in lieu of penalty and would thereby get immunityfrom prosecution.For category (B), asset value is proposed to beup to 5 crore rupees. Here, immunity from both penalty and prosecutionwill be available with the payment of feeof 1 lakh rupees.Rationalizing Penalty and Prosecution113. Multiplicity of proceedings are a hindrance to the ease of doingbusiness. I propose to integrate assessment & penalty proceedings byway of a common order for both. There will be no interest liability on thetaxpayer on the penalty amount for the period of appeal before the firstappellate authority irrespective of the outcome of appeal process.Further, quantum of pre-payment is being reduced from 20 percent to10 percent and will continue to be calculated only on core tax demand.114. As an additional measure for reducing litigation,I propose to allow taxpayers to update their returns even afterreassessment proceedings have been initiated, at an additional 10percent tax rate over and above the rate applicable for the relevant year.The assessing officer will then use only this updated return in hisproceedings.27115. There is already a framework for immunity from penalty andprosecution in the cases of underreporting. I propose to apply thisframework of immunity to misreporting too. However, in such a case thetaxpayer will need to pay 100 percent of the tax amount as an additionalincome tax over and above the tax and interest due.116. Penalties for certain technical defaults such as failure to getaccounts audited, non-furnishing of transfer pricing audit report anddefault in furnishing statement for financial transactions, are proposedto be converted into fee.117. I propose to rationalise prosecution framework under the IncomeTax Act while maintaining a careful balance for deterrence in someserious offences.118. Non-production of books of account and documents, andrequirement of TDS payment, where payment is made in kind, are beingdecriminalised. Further, minor offences will attract fine only.119. The remaining prosecutions will be graded commensurate withthe quantum of offence. They will entail only simple imprisonment, withmaximum imprisonment reduced to two years, and power to courts toconvert even those into fine.120. There is no penalty presently for non-disclosure ofnon-immovable foreign assets with aggregate value less than 20 lakhrupees. I propose to also provide them with immunity from prosecutionwith retrospective effect from 1.10.2024.Cooperatives121. Deduction is already allowed to a primary cooperative societyengaged in supplying milk, oilseeds, fruits or vegetables raised or grownby its members. I propose to extend this deduction to also includesupply of cattle feed and cotton seed produced by its members.28122. I propose to allow inter-cooperative society dividend income asdeduction under the new tax regime to the extent it is furtherdistributed to its members.123. I further propose to allow exemption for a periodof 3 years, to dividend income received by a notified nationalco-operative federation, on their investments made in companies up to31.1.2026. This exemption would be allowed only for dividends furtherdistributed to its member co-operatives.Supporting IT sector as India’s growth engine124. India is a global leader in software development services, ITenabled services, knowledge process outsourcing services and contractR&D services relating to software development. These businesssegments are quite inter-connected with each other.125. All these services are proposed to be clubbed under a singlecategory of Information Technology Serviceswith a common safe harbour margin of 15.5 percent applicable to all.126. The threshold for availing safe harbour for IT services is beingenhanced substantially from 300 crore rupees to 2,000 crore rupees.127. Safe harbour for IT services shall be approved by an automatedrule-driven process without any need for tax officer to examine andaccept the application. Once applied by an IT Services company, thesame safe harbour can be continued for a period of 5 years at a stretchat its choice.128. For IT services companies who want to conclude Advance PricingAgreement (APA), I propose to fast track Unilateral APA process for ITservices and endeavour to conclude it within a period of 2 years. Theperiod of 2 years can be extended by a further period of 6 months ontaxpayer’s request.29129. I propose to extend the facility of modified returns available tothe entity entering APA to its associated entities also.Attracting global business and investment130. Recognising the need to enable critical infrastructure and boostinvestment in data centres, I propose to provide tax holiday till 2047 toany foreign company that provides cloud services to customers globallyby using data centre services from India. It will, however, need to provideservices to Indian customers through an Indian reseller entity.131. I also propose to provide a safe harbour of 15 percent on cost incase the company providing data centre services from India is a relatedentity.132. To harness the efficiency of just-in-time logistics for electronicmanufacturing, I propose to provide safe harbour to non-residents forcomponent warehousing in a bonded warehouse at a profit margin of 2percent of the invoice value. The resultant tax of about 0.7 percent willbe much lower than in competing jurisdictions.133. To provide fillip to toll manufacturing in India,I propose to provide exemption from income taxfor 5 years, to any non-resident who provides capital goods, equipmentor tooling, to any toll manufacturer in a bonded zone.134. To encourage vast pool of global talent to work in India for alonger period of time, I propose to provide exemption to global(non-India sourced) income of a non-resident expert, for a stay period of5 years under notified schemes.135. I propose to provide exemption from Minimum Alternate Tax(MAT) to all non-residents who pay tax on presumptive basis.30Tax administration136. I propose to constitute a Joint Committee of Ministry ofCorporate Affairs and Central Board of Direct Taxes for incorporating therequirements of Income Computation and Disclosure Standards (ICDS) inthe Indian Accounting Standards (IndAS) itself. Separate accountingrequirement based on ICDS will be done away with from the tax year2027-28.137. To support PM Modi’s vision of home-grown accounting andadvisory firms to become global leaders, I propose to rationalise thedefinition of accountant for the purposes of Safe Harbour Rules.Other Tax proposals138. Change in taxation of buyback was brought in to address theimproper use of buyback route by promoters. In the interest of minorityshareholders, I propose to tax buyback for all types of shareholders asCapital Gains. However, to disincentivize misuse of tax arbitrage,promoters will pay an additional buyback tax. This will make effective tax22 percent for corporate promoters. For non-corporate promoters theeffective tax will be 30 percent.139. TCS rate for sellers of specific goods namely alcoholic liquor, scrapand minerals will be rationalized to 2 percent and that on tendu leaveswill be reduced from 5 percent to 2 percent.140. I propose to raise the STT on Futures to 0.05 percent frompresent 0.02 percent. STT on options premium and exercise of optionsare both proposed to be raised to 0.15 percent from the present rate of0.1 percent and 0.125 percent respectively.141. We reformed the taxation landscape for corporates in 2019 byproviding them a simplified regime with lower tax rate so that they couldproductively focus on business rather than on claim of deductions andexemptions.142. To encourage companies to shift to the new regime, set-off ofbrought forward MAT credit is proposed to be allowed to companies onlyin the new regime. Set-off using available MAT credit is proposed to beallowed to an extent of 1/4th of the tax liability in the new regime.143. MAT is proposed to be made final tax. So, there will be no furthercredit accumulation from 1st April 2026.In line with this change, the rate of final tax is being reduced to 14percent from the current MAT rateof 15 percent. The brought forward MAT credit of taxpayers accumulatedtill 31st March 2026, will continue to be available to them for set-off asabove.Indirect Taxes144. I shall now take up proposals related to Indirect Taxes. Myproposals for Customs and Central Exciseaim to further simplify the tariff structure, support domesticmanufacturing, promote export competitiveness, and correct inversionin duty.Review of exemptions and tariff simplification145. To continue weeding out long continuing customs dutyexemptions, I propose to remove certain exemptions on items which arebeing manufactured in India or where the imports are negligible.Similarly, to further simplify the process of ascertaining the rate of dutyapplicable on a particular item, I propose to incorporate certain effectiverates in various customs notifications to the tariff schedule itself.32146. I shall now take up sector specific proposals.Promotion of exports of marine, leather, and textile products147. I propose to increase the limit for duty-free imports of specifiedinputs used for processing seafood products for export, from the current1 per cent to 3 per cent of the FOB value of the previous year’s exportturnover.148. I also propose to allow duty-free imports of specified inputs,which is currently available for exports of leather or synthetic footwear,to exports of Shoe Uppers as well.149. I propose to extend the time period for export of final productfrom the existing 6 months to 1 year, for exporters of leather or textilegarments, leather or synthetic footwear and other leather products.Energy transition and security150. I propose to extend the basic customs duty exemption given tocapital goods used for manufacturing Lithium-Ion Cells for batteries, tothose used for manufacturing Lithium-Ion Cells for battery energystorage systems too.151. I propose to exempt basic customs duty on import of sodiumantimonate for use in manufacture of solar glass.Nuclear Power152. I propose to extend the existing basic customs duty exemption onimports of goods required for Nuclear Power Projects till the year 2035and expand it for all nuclear plants irrespective of their capacity.Critical Minerals33153. It is proposed to provide basic customs duty exemption to theimport of capital goods required for processing of critical minerals inIndia.Biogas blended CNG154. I propose to exclude the entire value of biogaswhile calculating the Central Excise duty payable on biogas blended CNG.Civil and Defence Aviation155. I propose to exempt basic customs duty on components andparts required for the manufacture of civilian, training and otheraircrafts.156. It is proposed to exempt basic customs duty on raw materialsimported for manufacture of parts of aircraft to be used in maintenance,repair, or overhaul requirements by Units in the Defence sector.Electronics157. To deepen value addition in the consumer electronics sector, Ipropose to exempt basic customs duty on specified parts used in themanufacture of microwave ovens.Special Economic Zone158. To address the concerns arising about utilization of capacities bymanufacturing units in the Special Economic Zones due to global tradedisruptions, I propose, as a special one-time measure, to facilitate salesby eligible manufacturing units in SEZs to the Domestic Tariff Area (DTA)at concessional rates of duty. The quantity of such sales will be limited to34a prescribed proportion of their exports. Necessary regulatory changeswill be undertaken to operationalise these measures while ensuringlevel-playing field for the units working in the DTA.Ease of Living159. To rationalize the customs duty structure for goods imported forpersonal use, I propose to reduce the tariff rate on all dutiable goodsimported for personal use from 20 per cent to 10 per cent.160. To provide relief to patients, particularly those suffering fromcancer, I propose to exempt basic customs duty on 17 drugs ormedicines.161. I also propose to add 7 more rare diseases for the purposes ofexempting import duties on personal imports of drugs, medicines andFood for Special Medical Purposes (FSMP) used in their treatment.Customs Process162. India's role and share in global trade is poised for a major leap, inline with our ambition and journey towards 'Viksit Bharat'. In this regard,I propose many measures for custom processes to have minimalintervention for smoother and faster movement of goods and greatercertainty to the trade.Trust-based systems163. I propose to enhance duty deferral period forTier 2 and Tier 3 Authorised Economic Operators, known as AEOs, from15 days to 30 days.35164. I propose to provide eligible manufacturer-importers the sameduty deferral facility. This should encourage them to get themselvesaccredited as a full-fledged Tier 3- AEO in due course.165. To provide greater certainty and for better business planning, Ipropose to extend validity period of advance ruling, binding on Customs,from the present 3 years to 5 years.166. In the spirit of whole-of-the-government approach, Governmentagencies will be encouraged to leverage AEO accreditation forpreferential treatment in clearing their cargo.167. Regular importers with trusted longstanding supply chains will berecognized in the risk system, so that the need for verification of theircargo every time can be minimized. Export cargo using electronic sealingwill be provided through clearance from the factory premises to the ship.168. For import of goods not needing any compliance, filing of bill ofentry by a trusted importer, and arrival of goods will automatically notifyCustoms for completing their clearance formalities. This will enablegoods to be released immediately on arrival.169. The Customs warehousing framework will be transformed into awarehouse operator-centric system with self-declarations, electronictracking and risk-based audit. These reforms will move away from thecurrent system of officer-dependent approvals, and reduce transactiondelays and compliance costs.36Ease of Doing Business170. Approvals required for cargo clearance from various Governmentagencies will be seamlessly processed through a single andinterconnected digital window by the end of the financial year. Processesinvolved in clearance of food, drugs, plant, animal & wild life products,accounting for around 70 percent of interdicted cargo, will beoperationalised on this system by April 2026 itself.171. For goods not having any compliance requirement, clearance willbe done by Customs immediately after online registration is completedby the importer, subject to the payment of duty.172. Customs Integrated System (CIS) will be rolled outin 2 years as a single, integrated and scalable platform for all the customsprocesses.173. Utilization of non-intrusive scanning with advanced imaging andAI technology for risk assessment will be expanded in a phased mannerwith the objective to scan every container across all the major ports.New export opportunities174. To support Indian fishermen to fully harness the economic valueof marine resources beyond our territorial waters, the followingmeasures will be taken.a. Fish catch by an Indian fishing vessel in Exclusive Economic Zone(EEZ) or on the High Seas will be made free of duty.37b. Landing of such fish on foreign port will be treated as export ofgoods.Safeguards will be put in place to prevent misuse during fish catch,transit and transshipment.175. To support aspirations of India’s small businesses, artisans andstart-ups to access global markets through e-commerce, I am pleased toannounce complete removal of the current value cap of ₹10 lakh perconsignment on courier exports. In addition, handling of rejected andreturned consignments will be improved with effective use of technologyfor identifying such consignments.Ease of Living176. I propose to revise provisions governing baggage clearanceduring international travel to address genuine concerns of passengers.The revised rules will enhance duty-free allowances in line with thepresent-day travel realities and provide clarity in temporary carriage ofgoods brought in or taken out.177. There are honest taxpayers who are willing to settle disputes bypaying all their dues. But they get deterred due to negative connotationassociated with penalty. They will now be able close cases by paying anadditional amount in lieu of penalty.Honourable Speaker Sir, with this, I commend the Budget to this augustHouse.Jai Hind!