Donning a handwoven Kanjeevaram silk sari, honouring Tamil Nadu’s age-old weaving legacy, Finance Minister Nirmala Sitharaman stood up in Parliament today (February 1) to deliver her record ninth Union Budget.
The finance minister began her Budget speech noting that the proposals were guided by three key kartavyas that shape the government’s economic vision. Finance Minister Nirmala Sitharaman also noted that since assuming power, the Narendra Modi government has chosen reforms over rhetoric.
“Since we assumed office 12 years ago, the country’s economic trajectory has been marked by stability, fiscal discipline, sustained growth and moderate inflation. This is the result of conscious choices we have made even in times of uncertainty and disruptions,” Nirmala Sitharaman said.
However, if you missed the Budget speech, here are the big takeaways from Finance Minister Nirmala Sitharaman’s Budget 2026 speech.
3 ‘kartavyas’ driving this year’s Budget
At the commencement of her Budget speech, Finance Minister Nirmala Sitharaman said it is ‘yuva shakti’ (youth energy) driven and is inspired by three
‘kartavyas’ (duties). The finance minister said many youngsters had shared innovative ideas with Prime Minister Narendra Modi during the Viksit Bharat young leaders dialogue 2026. “They have inspired many of the proposals, making this a unique ‘yuva shakti’-driven budget,” she noted.
According to her, the first kartavya focuses on sustained economic growth while building resilience in the face of global uncertainties. Sitharaman said the government aims to strengthen the economy so it can withstand shocks and continue growing steadily.
The second priority is fulfilling the full aspirations of the people. The Budget, she said, seeks to address everyday concerns such as jobs, income stability and access to essential services, while creating new opportunities across sectors.
And the third kartavya aligns with the mission of ‘sabka saath, sabka vikas’, stressing inclusive development. Sitharaman said the government remains committed to ensuring growth reaches all sections of society, with policies designed to balance economic progress with social welfare.
A Rs 10,000-crore boost to SMEs
To give India’s smallest businesses a further boost, Finance Minister Nirmala Sitharaman unveiled new funds. Finance Minister Nirmala Sitharaman stated that the Self Reliant India Fund will get a Rs 2,000 crore top up. This is expected to support micro enterprises that remain capital-starved despite credit guarantee schemes.
Moreover, a Rs 10,000 crore SME Growth Fund will be introduced to scale high potential firms. The fund will operate alongside incentive frameworks that reward SMEs meeting select criteria such as productivity, formalisation and export readiness.
The government will also launch a scheme to revive 200 legacy industry clusters, targeting traditional hubs that have thinned out due to credit stress and outdated technology.
Seven new high-rail corridors
Finance Minister Nirmala Sitharaman also announced that India will develop
seven high-speed rail corridors between key cities, which will serve as ‘growth connectors’ to promote environmentally sustainable passenger systems.
These high-speed corridors will connect Mumbai and Pune, Hyderabad and Pune, Hyderabad and Bengaluru, Chennai and Bengaluru, Delhi and Varanasi, and Varanasi and Siliguri.
Expenditure raised to Rs 12.2 lakh crore
Highlighting the sustained increase in government capital expenditure (capex) over the years, Nirmala proposed to increase the government capex to Rs 12.2 lakh crore for FY27 from Rs 11.2 lakh crore in FY26.
According to Crisil, this outlay marks an 8.9 per cent increase over the current fiscal and is expected, but lower than what is needed.
Focus on rare earths
One big highlight of Union Budget 2026 was the focus on rare earths. To push for this, Finance Minister Nirmala Sitharaman has proposed the establishment of
dedicated rare earth corridors in Odisha, Andhra Pradesh, Tamil Nadu and Kerala.
The move aims to promote mining, research, processing and manufacturing, she said. To expand India’s rare earths capacity, she also proposed to establish high-tech tool rooms by central public sector enterprises at two locations.
She further added that the digitally enabled automation service bureaus would locally design, test and manufacture high precision components at scale and at lower cost.
For those who are unaware, rare earths are 17 elements that are crucial in everything, ranging from electronics, like smartphones, to electric vehicles and even fighter jets. As of today, China is the dominant player in this sector — it accounts for about 60 per cent global mine production and nearly 90 per cent of refined production and rare earth magnet output.
By focusing on rare earths, India is trying to reduce its dependency on the Asian giant. Finance Minister Sitharaman also said that the announcement is part of the push to make India ‘atmanirbhar’, or self-reliant.
Textiles, khadi and handloom get a boost
Budget 2026 has placed special attention to strengthening India’s textile sector. Finance Minister Nirmala Sitharaman has proposed setting up mega textile parks with a clear focus on value addition in technical textiles. These parks are expected to improve scale, reduce costs and attract investment.
The Budget also proposed an integrated textile programme with five sub-parts, bringing various existing schemes under one umbrella to improve efficiency and coordination.
In her Budget speech, the finance minister also announced the Mahatma Gandhi Gram Swaraj initiative to strengthen khadi and handloom activities at the village level. Moreover, she announced a Natural Fibre Scheme, a Textile Expansion and Employment Scheme, and a National Handloom and Handicraft Programme, aimed at boosting livelihoods while preserving India’s rich textile heritage.
Budget bets on tourism
Budget 2026 has identified tourism as a sector for employment-led growth, with Finance Minister Nirmala Sitharaman saying the tourism sector can play a major role in creating jobs, earning foreign exchange, and strengthening local economies.
Keeping this in mind, the Union Budget has announced several measures in this sector. Firstly, the government will set up a National Institute of Hospitality to improve training. The institute will work with colleges, companies, and government bodies to improve education and quality standards in tourism services.
In addition, a special pilot scheme will be launched to train 10,000 tourist guides across 20 iconic tourist locations. These guides will undergo a 12-week training programme using both online and offline methods. The training will be done in partnership with the Indian Institute of Management.
The Budget also focused on eco-tourism and outdoor travel. The government will develop sustainable trekking and hiking trails in Himachal Pradesh, Uttarakhand, Jammu and Kashmir, Araku Valley in the Eastern Ghats, and Pudigai Malai in the Western Ghats. Special wildlife tourism trails will also be created. These include turtle trails in Odisha, Karnataka, and Kerala, and bird-watching trails near Pulicat Lake. These projects aim to promote responsible tourism while protecting nature.
Simplified tax rules to come in shortly
One of the biggest Budget announcements that pertains to the common man was the simplification of tax rules. Finance Minister Nirmala Sitharaman stated that simplified Income Tax rules and forms will be notified shortly.
The forms have redesigned such that ordinary citizens can comply without difficulty, she added. The new rules and forms follow the comprehensive review of the Income Tax Act, 1961, which was announced in July 2024. The Income Tax Act, 2025, will come into effect from April 1, 2026, Sitharaman further stated.
Sitharaman also proposed extending the deadline for filing revised returns from December 31 to March 31, subject to the payment of a nominal fee. This aims at giving taxpayers additional time to correct errors or update disclosures without facing harsher penalties.
However, no changes were introduced in the Income Tax, providing no relief to the common man.
Tax holiday for foreign cloud companies
Sitharaman also proposed a tax holiday until 2047 for foreign companies providing cloud services to Indian customers, signalling a long-term policy push to attract global cloud players and deepen India’s digital infrastructure ecosystem.
She also announced tax holidays until 2047 for foreign companies that provide cloud services globally through data centres in India. She said these firms will need to serve Indian customers through an Indian reseller entity. Separately, the FM said the government will work to conclude the advance pricing agreement (APA) process for IT services companies within two years.
NRIs to get a huge boost from Budget
The Budget 2026 seems to be a godsend for NRIs. A number of measures and proposals have been introduced this Budget that is advantageous to NRIs. The first such measure is allowing individuals living abroad to invest in Indian stocks through the Portfolio Investment Scheme. This, according to experts, will deepen India’s pool of long-term, stable capital at a time when foreign portfolio investor inflows have slowed.
Other measures that benefit NRIs is raising the individual investment limit for Persons Resident Outside India (PROIs) from five per cent to 10 per cent. Also, the overall investment limit for all PROIs has been increased from 10 per cent to 24 per cent. The Budget also announced that residents living abroad will be able to invest in Indian equities via a portfolio route.
With inputs from agencies
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