Finance Minister Nirmala Sitharaman on February 1 presented her record ninth Union Budget. Sitharaman laid out an economic roadmap that looks to be in continuity with targeted shifts aimed at growth, resilience and long-term competitiveness. Framing her speech around “three core kartavyas” guiding the government’s vision, Sitharaman said the administration had consistently chosen “reforms over rhetoric” since coming to power.
Below are the key business and economy highlights from Union Budget 2026:
Capital expenditure raised
Public capital expenditure has been raised to Rs 12.2 lakh crore for FY27, up from Rs 11.2 lakh crore in FY26. The government reiterated that infrastructure-led growth remains a central policy lever.
Rare earths strategy
A major strategic announcement was the proposal to establish dedicated rare earth corridors in Odisha, Andhra Pradesh, Tamil Nadu and Kerala. The government also plans to set up high-tech tool rooms and digitally enabled automation service bureaus to support precision manufacturing.
The move is aimed at reducing India’s dependence on global supply chains dominated by China. Sitharaman said the initiative aligns with the broader Atmanirbhar Bharat push.
High-speed rail corridors
Seven high-speed rail corridors will be developed to promote environmentally sustainable passenger transport and improve regional connectivity. The corridors will link Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi and Varanasi-Siliguri.
SME funding and industrial clusters
The Budget announced a Rs 2,000 crore top-up to the Self Reliant India Fund to support micro enterprises that remain under-capitalised despite credit guarantee schemes. In addition, a Rs 10,000 crore SME Growth Fund will be launched to help scale high-potential firms, with incentives linked to productivity, formalisation and export readiness.
The government also proposed a scheme to revive 200 legacy industry clusters that have been impacted by credit stress and outdated technology.
Tax simplification
Simplified Income Tax rules and forms will be notified shortly, following a review of the Income Tax Act. The new Income Tax Act, 2025, will come into force from April 1, 2026. The deadline for filing revised returns will be extended to March 31, subject to a nominal fee. However, the Budget offered no changes in tax rates, providing little direct relief to individual taxpayers.
Textiles and handloom
The Budget proposed setting up mega textile parks focused on technical textiles and value addition. An integrated textile programme with five sub-components will consolidate existing schemes. New initiatives for khadi, natural fibres, handloom and handicrafts were also announced to support rural livelihoods.
Tourism as a growth driver
Tourism was identified as a sector with high employment potential. The government will set up a National Institute of Hospitality and launch a pilot programme to train 10,000 tourist guides across 20 locations. Eco-tourism initiatives, including trekking trails and wildlife tourism circuits, were also announced.
Cloud and digital infrastructure
The Budget proposed a tax holiday until 2047 for foreign companies providing cloud services through data centres in India. The government also committed to resolving advance pricing agreement cases for IT services firms within two years.
NRI investment reforms
NRIs will be allowed to invest in Indian equities through the Portfolio Investment Scheme. Individual investment limits for Persons Resident Outside India have been raised from 5% to 10%, while the aggregate limit has been increased from 10% to 24%.